What is the Child and Dependent Care Credit?
The Child and Dependent Care Credit is a tax benefit that helps families pay for child care they need in order to work or to look for work. They credit is also available to families that must pay for the care of a spouse or an adult dependent who is incapable of caring for himself or herself. The Child and Dependent Care Credit can reduce the amount of federal income tax a family pays in two ways. For families that pay income taxes but do not owe taxes at the end of the year because they have fully paid the taxes for the year through payroll withholding, this credit can give them back some of all of the federal taxes that were taken out of the parents’ paychecks during the year. For families that end up owing taxes at the end of the year, the credit can lower the amount the must pay to the IRS. For the year 2007, parents can claim as much as $3,000 in dependent care expenses per child (up to $6,000 for two or more children). Please note, however, that families earning too little to pay
The child and dependent care credit is an amount deducted from your total taxes owed to the US Internal Revenue Service (IRS). Qualifying for the credit depends in part on whether your child or dependent is considered a “qualifying” person, how much money you make, and exactly what money you had to pay in order to care for the qualifying person. Many people use the child and dependent care credit to offset payments to daycare facilities, to nannies, housekeepers, or people who provide personal care for a disabled dependent. But it doesn’t represent a dollar for dollar cost of your actual expense. Amounts will differ from year to year because tax codes and tax laws change frequently. In IRS publications, the child and dependent care credit clearly defines who can take the credit and which people are considered qualifying persons. Any child who lives with you full-time and is under the age of 13 qualifies. Any person, such as a spouse or older child who lives with you full-time and is me
The Child and Dependent Care Credit is a tax credit for single individuals or married couples who have incurred child or dependent care expenses in caring for qualified children, dependents or spouses while working or looking for work. People who qualify for the credit are allowed up to $3,000 of care for one dependent or $6,000 of care expenses for two or more qualifying dependents. The amount of the credit is based upon income ranging from 20-35% of care expenses. The maximum amount of credit is $2,100. WHO IS ELIGIBLE FOR THE CHILD AND DEPENDENT CARE CREDIT? To be eligible for the credit, single or married people: • Must have provided care for one or more qualifying persons • If care was provided at home, the qualifying person must have lived at the residence for more than half of the year • Cannot pay someone to provide care who is a child under age 19 or that they claim as a dependent • Must have earned income from wages or net earnings from self-employment • Must have work-relate
The Child and Dependent Care Credit is a tax benefit that helps families pay for child care they need in order to work or to look for work. The credit also is available to families that must pay for the care of a spouse or an adult dependent who is incapable of caring for himself or herself. The Child and Dependent Care Credit can reduce the amount of federal income tax a family pays in two ways. For families that pay income taxes but do not owe taxes at the end of the year (because they have fully paid their taxes for the year through payroll withholding), this credit can give them back some or all of the federal taxes that were taken out of the parents’ paychecks during the year. For families that end up owing taxes at the end of the year, the credit can lower the amount they must pay to the IRS. In 2008, parents can claim as much as $3,000 per child (up to $6,000 for two or more children). Please note, however, that families earning too little to pay federal income tax cannot use th
The Child and Dependent Care Credit allows taxpayers to claim a credit for expenses paid for the care of children under age 13 and for a disabled spouse or dependent. In order to claim the credit, the taxpayer, child or dependent, and expenses must meet numerous requirements. There is a limit to the amount of qualifying expenses. The credit is a percentage of the qualifying expenses.
