1. Your expenses must be for the care of
one or more qualifying persons. Your dependent child or children under
age 13 usually qualify. For more about this rule see Publication 503, Child and Dependent Care Expenses.
2. Your expenses for care must be
work-related. This means that you must pay for the care so you can work
or look for work. This rule also applies to your spouse if you file a
joint return. Your spouse meets this rule during any month they are a
full-time student. They also meet it if they’re physically or mentally
incapable of self-care.
3. You must have earned income, such as
from wages, salaries and tips. It also includes net earnings from
self-employment. Your spouse must also have earned income if you file
jointly. Your spouse is treated as having earned income for any month
that they are a full-time student or incapable of self-care. This rule
also applies to you if you file a joint return. Refer to Publication 503
for more details.
4. As a rule, if you’re married you must
file a joint return to take the credit. But this rule doesn’t apply if
you’re legally separated or if you and your spouse live apart.
5. You may qualify for the credit whether you pay for care at home, at a daycare facility or at a day camp.
6. The credit is a percentage of the
qualified expenses you pay. It can be as much as 35 percent of your
expenses, depending on your income.
7. The total expense that you can use for
the credit in a year is limited. The limit is $3,000 for one qualifying
person or $6,000 for two or more.
8. Overnight camp or summer school tutoring
costs do not qualify. You can’t include the cost of care provided by
your spouse or your child who is under age 19 at the end of the year.
You also cannot count the cost of care given by a person you can claim
as your dependent. Special rules apply if you get dependent care
benefits from your employer.
9. Keep all your receipts and records. Make
sure to note the name, address and Social Security number or employer
identification number of the care provider. You must report this
information when you claim the credit on your tax return.
10. Remember that this credit is not just a
summer tax benefit. You may be able to claim it for care you pay for
throughout the year.
Additional IRS Resources:
- Tax Topic 602 - Child and Dependent Care Credit
- Frequently Asked Questions - Child Care Credit
- Publication 926, Household Employer's Tax Guide
- Publication 907, Tax Highlights for Persons With Disabilities
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