You will qualify for the credit if you:
- have paid for care
expenses in order to earn taxable income. If you are married both
spouses must work either full or part time. Spouses who are full time
students or incapacitated are excepted.;
- pay more than 50% of the
household maintenance costs for a qualifying dependent;
- file your tax return
jointly if married, unless the separation rules apply;
- hire someone other
than your child (under age 19 at the end of the tax year),
your spouse, or a person you can claim as a dependent;
- have qualifying expenses
over and above any tax free reimbursements from your employer;
- report on your IRS tax
return the name, address, and taxpayer identification number of the
child care provider. If the care provider is a tax exempt organization
the taxpayer identification number is not required.
In order to claim the
credit, you must maintain as your principal home a
household for at least one of the following qualifying persons who live
with you:
- a child under 13 years
of age whom you claim as a dependent;
- your spouse if your
spouse is physically or mentally incapable of caring for himself or
herself;
- a person who is
physically or mentally incapable of caring for himself or herself
regardless of age.
The following qualifying
expenses (maximum $2,400 for one dependent, $4,800 for more than one) must
be reduced by any tax free reimbursements that you receive from your
employer:
-
costs of
caring for your dependent under age 13, incapacitated spouse, or
incapacitated dependent in your home;
-
ordinary
domestic services in your home, such as cooking, cleaning, and laundry
that are partly for the care of the qualifying person;
-
out-of-the-home
care costs for a child under age 13 in a day care center, day camp,
nursery school, or in the home of a baby sitter. These costs also
qualify for the credit if they are for a
handicapped dependent, regardless of age, if he/she spends at least
eight (8) hours per day in your home.
Each child for whom the
credit is claimed must have a Social Security or Taxpayer
Identification Number. Special
tax rules apply if your spouse is a student, is incapable of
caring for himself or herself, for separations, and for payments to
relatives.
Employment-related expenses
that qualify for the credit include household
services and expenses for care of the qualifying individual. Expenses of
attending a daytime summer camp qualify for the credit if that is a reasonable means of providing care during working
hours. Overnight camp expenses do not qualify. A nursery school generally qualifies for the
credit, but an elementary school does not.
The credit is allowed for $2,400 of expenses for one dependent's care and
$4,800 for more than one dependent's care. See the table below to
determine your Child and Dependent Care Credit.
Maximum
Allowable Childcare Credit |
Adjusted Gross Income |
Credit
% |
One
Child |
Two or more
Children |
$10,000 or less |
30% |
$720 |
$1,440 |
$10,001-$12,000 |
29% |
$696 |
$1,392 |
$12,001-$14,000 |
28% |
$672 |
$1,344 |
$14,001-$16,000 |
27% |
$648 |
$1,296 |
$16,001-$18,000 |
26% |
$624 |
$1,248 |
$18,001-$20,000 |
25% |
$600 |
$1,200 |
$20,001-$22,000 |
24% |
$576 |
$1,152 |
$22,001-$24,000 |
23% |
$552 |
$1,104 |
$24,001-$26,000 |
22% |
$528 |
$1,056 |
$26,001-$28,000 |
21% |
$504 |
$1,008 |
$28,001 and over |
20% |
$480 |
$960 |
|