- Days left

Tax Tips: Child and dependent care credit

You may be eligible for a tax credit of up to $3,000 (one child) or $6,000 (two or more children) for child care costs incurred to allow you to be gainfully employed. The qualifying child (or other dependent) must be unable to care for herself or himself and living with the taxpayer. A child must be under the age of 13 to qualify.

In order to claim the credit, the taxpayer must report the social security number of the person providing the child care, or the federal identification number of the daycare center providing the care. If one spouse is not working, no credit is allowed. (One exception to this may occur if the spouse is a full-time student.) If both spouses are working, the eligible child care costs cannot exceed the wages of the lower earning spouse.

The amount of the credit is usually 25% to 35% of the qualifying child care expenses, but the rate changes depending on the income of the taxpayer. One note: Tuition at a preschool or private school is not considered a qualifying daycare expense.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

TurboTax Articles

5 Hidden Ways to Boost Your Tax Refund

Most of us are looking for ways to pay no more than we owe in taxes, or even boost our tax refunds. Here are five strategies that go beyond the obvious with tried-and-true ways to reduce your tax liability.

What, Me Worry? Last Minute Taxes

According to the Internal Revenue Service, 20-25% of all Americans wait until the last two weeks before the deadline to prepare their tax returns. At that late date, there are only two things you can do: File your taxes pronto, or request a tax extension.

Can't File by the Deadline? Top 3 Reasons to File a Tax Extension

The Internal Revenue Service allows taxpayers to file for a 6-month extension if they need more time to prepare their tax return. You can obtain a tax extension for any reason; the IRS grants them automatically as long as you complete the proper form on time. Check your state tax laws; some states accept IRS extensions while others require you to file a separate state extension form.

Add a Comment

*0 / 3000 Character Maximum