Child Care Credit
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Child care and dependent care expenses may be eligible for a tax credit as long as the expenses are employment related. The child care expenses must make it possible for you (and your spouse, if married) to go to or look for work. Babysitting and child care expenses that aren't related to your job are NOT eligible for the credit.
You're eligible for the credit if you (and your spouse, if married) have earned income and maintain a household for a dependent under age 13, or for a spouse or other dependent (regardless of age) who is mentally or physically unable to care for themselves.
If you or your spouse is a full-time student, you can still qualify for the Child Care Credit, even if one person had no earned income. However, if both of you are students and have no earned income, you can't take the credit.
The total amount of child care expenses that can be used for the credit is $3,000 for one child or $6,000 for two children. If you're reimbursed for care expenses through your employer, the expense ceiling of $6,000 ($3,000 for one eligible dependent) is reduced by the amount of reimbursement or employer assistance.
To qualify for the credit, you must pay for more than one-half of the cost of running your household for the year and you must live in the same residence as the qualifying child (or individual).
Examples of qualified child care and dependent care expenses include payments to daycare centers, work-related babysitting, day camps, after-school programs, nursery school, pre-school, domestic help, and nannies.
Examples of expenses that do NOT qualify are overnight camps, transportation costs, and expenses to attend kindergarten or a higher grade.
Payments to relatives count for the credit as long as the relative is not your dependent or spouse. So, grandparents, uncles, aunts, and your adult children (19 or older) qualify as child care providers if you do not claim the relative as a dependent on your tax return. Keep in mind that if you claim the Child Care Credit for payments to a relative as a child care provider, the IRS will expect that relative to report the child care payments received as income on the relative's tax return.
Divorce
The parent with custody is entitled to the Child Care Credit, even if that parent has waived their right to claim the dependent to the noncustodial parent.
Child care and dependent care expenses may be eligible for a tax credit as long as the expenses are employment related. The child care expenses must make it possible for you (and your spouse, if married) to go to or look for work. Babysitting and child care expenses that aren't related to your job are NOT eligible for the credit.
You're eligible for the credit if you (and your spouse, if married) have earned income and maintain a household for a dependent under age 13, or for a spouse or other dependent (regardless of age) who is mentally or physically unable to care for themselves.
If you or your spouse is a full-time student, you can still qualify for the Child Care Credit, even if one person had no earned income. However, if both of you are students and have no earned income, you can't take the credit.
The total amount of child care expenses that can be used for the credit is $3,000 for one child or $6,000 for two children. If you're reimbursed for care expenses through your employer, the expense ceiling of $6,000 ($3,000 for one eligible dependent) is reduced by the amount of reimbursement or employer assistance.
To qualify for the credit, you must pay for more than one-half of the cost of running your household for the year and you must live in the same residence as the qualifying child (or individual).
Examples of qualified child care and dependent care expenses include payments to daycare centers, work-related babysitting, day camps, after-school programs, nursery school, pre-school, domestic help, and nannies.
Examples of expenses that do NOT qualify are overnight camps, transportation costs, and expenses to attend kindergarten or a higher grade.
Payments to relatives count for the credit as long as the relative is not your dependent or spouse. So, grandparents, uncles, aunts, and your adult children (19 or older) qualify as child care providers if you do not claim the relative as a dependent on your tax return. Keep in mind that if you claim the Child Care Credit for payments to a relative as a child care provider, the IRS will expect that relative to report the child care payments received as income on the relative's tax return.
Divorce
The parent with custody is entitled to the Child Care Credit, even if that parent has waived their right to claim the dependent to the noncustodial parent.
