Are you responsible for paying expenses relating to the care of your child? If so you may be eligible for tax credit that can save you money on these expenses. There are some requirements in order to qualify for this credit. For example, the child must be under the age of 13, but the credit also covers dependence or spouses or mentally or physically unable to care for themselves. Additionally, you must pay the expenses to cover their care while you work or go to school.
The tax credit is worth up to $3000 for a single child or dependent, or up to $6000 for two or more children. The credit is calculated on form 2441, and the minimum amount is 35% of expenses that qualify. You must have earned more at work then you paid in depending care expenses.
You can exclude up to $5000 from your income if your employer reimburses these expenses or offers a special day care program. You are still required to meet the qualifications of the dependent care credit. Any expenses that were repaid are not eligible to be claimed. You also won’t be able to claim the credit if you paid expenses after you received reimbursement. This means if your employer the credit amount in reimbursements, you won’t qualify for any additional expenses.
If you’re eligible to claim the child and appending care credit than file form 2441 with your tax return. You should know that you’ll have to provide the name, Social Security Number, or employer identification number, and contact information of your care provider in addition to the amount you paid.