- Days left
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.

Increase your money and finance knowledge from home

Building Credit from Scratch

Start building credit...now.

View Course »

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »

TurboTax Articles

What Are the Tax Penalties for Smokers?

Starting in 2014, the Individual Shared Responsibility provision of the Affordable Care Act made you responsible for having minimum essential coverage, or MEC, in health insurance. Otherwise, you need to be eligible for a health care exemption, or you could pay a penalty when filing your income tax return. This requirement for minimum essential coverage applies to smokers and nonsmokers alike. If you're not covered by an employer's health plan and are a smoker, you can go to the health care marketplace to find MEC. If you're still unable to comply, you may have a penalty applied.

A Brief History of Income Taxes

Did you know President Abraham Lincoln, one of America's most beloved leaders, also instituted one of its least liked obligations - the income tax? In this brief history of taxes, see the historical events which shaped income taxes in the United States today.

How to Itemize Taxes When Claiming Dependents

Claiming dependents and itemizing deductions is an effective way to save money on your income taxes. Each dependent you claim allows you to reduce your taxable income by one exemption. Get a step-by-step overview on how to take advantage of itemizing your taxes when claiming dependents in this article on tax tips.

Add a Comment

*0 / 3000 Character Maximum