Have you had to pay for someone to take care of your dependents while you worked? If so, you may be able to claim a special tax credit to help offset some of the costs. This credit, the Child and Dependent Care Tax Credit, has certain requirements that taxpayers must meet. These include:
- You must have incurred the care expenses while you either worked or sought employment. Married taxpayers have to both be working or seeking employment, provided neither of you is disabled or a full-time student. If so, the requirement to work does not apply.
- The care must have been provided to a “Qualifying person”. A child under age 13, a spouse or dependent who lives with you but is disabled and incapable of caring for themselves, are qualifying persons. You’ll need the Social Security number of the person for whom care was provided in order to claim the credit.
- You have to have earned income throughout the tax year. Married taxpayers both have to earn income, and any form of dependent care reimbursement by your employer is subject to additional requirements in order to claim the credit.
- The Child and Dependent Care credit depends on your income, and can be about 20% and 35% of all the allowable expenses incurred, with a max of $3,000 in expenses for one dependent, and $6,000 for two or more dependents.
- The care provider will have to supply you with their taxpayer identification number, and you’ll have to fill out their name and contact information on the credit claim Form 2441, which you file with your tax return.