Who can claim the child and dependent care credit OR the early childhood development credit on the IA 1040?
Beginning with tax year 2006, one of the two credits may be taken — child and dependent care credit OR early childhood development tax credit. Only taxpayers with a net income of less than $45,000 are eligible to take one of these credits. If you are choosing the early childhood development tax credit, you may take the credit equal to 25 percent of the first $1,000 of qualifying expenses paid for each dependent from the ages of three through five. If you are married, your net income and the net income of your spouse must be combined to determine if you qualify, even if your spouse does not file an Iowa return. These credits are refundable. Even though you may not be required to file an Iowa return, you may wish to do so in order to claim a refund for whichever credit benefits you the most.
