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Don’t Overlook the Child and Dependent Care Tax Credit

IRS Tax Tip 2014-37, March 20, 2014

Many people pay for the care of their child or other dependent while they’re at work. The Child and Dependent Care Credit can reduce that cost. Here are 10 facts from the IRS about this important tax credit:

  1. You may qualify for the credit if you paid someone to care for your child, dependent or spouse last year.

  2. The care you paid for must have been necessary so you could work or look for work. This also applies to your spouse if you are married and filing jointly.

  3. The care must have been for ‘qualifying persons.’ A qualifying person can be your child under age 13. They may also be a spouse or dependent who is physically or mentally incapable of self-care. They must also have lived with you for more than half the year.

  4. You, and your spouse if you file jointly, must have earned income, such as wages from a job. Special rules apply to a spouse who is a student or disabled.

  5. The payments for care can’t go to your spouse, the parent of your qualifying person or to someone you can claim as a dependent on your return. Care payments also can’t go to your child under the age of 19, even if the child isn’t your dependent.

  6. The credit is worth up to 35 percent of the qualifying costs for care, depending on your income. The limit is $3,000 of your total cost for the care of one qualifying person. If you pay for the care of two or more qualifying persons, you can claim up to $6,000 of your costs.

  7. If your employer provides dependent care benefits, special rules apply. For more see Form 2441, Child and Dependent Care Expenses.

  8. You must include the Social Security number of each qualifying person to claim the credit.

  9. You must include the name, address and identifying number of your care provider to claim the credit. This is usually the Social Security number of an individual or the Employer Identification Number of a business.

  10. To claim the credit, attach Form 2441 to your tax return. If you use IRS e-file to prepare and file your return, the software will do this for you.

For more on this topic see Publication 503, Child and Dependent Care Expenses. You can get it and Form 2441 on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

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Page Last Reviewed or Updated: 19-Mar-2014