Top Frequently Asked Questions for Childcare Credit, Other Credits
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No, tuition for kindergarten isn't a qualifying expense for the child and dependent care credit because expenses to attend kindergarten or a higher grade aren't expenses for the child's care.
However, the expense for a before- or after-school care program of a child in kindergarten or a higher grade may qualify, even though the expense of school tuition doesn't qualify.
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Yes, you can still claim the child and dependent care credit when you're missing the provider's social security number or other taxpayer identification number by demonstrating due diligence in attempting to secure this information.
Claim the childcare expenses on Form 2441, Child and Dependent Care Expenses and provide the care provider's information you have available (such as name and address). Write "See Attached Statement" in the columns missing information. Explain on the attached statement that you requested the provider's identifying number, but the provider didn't give it to you. This statement supports use of due diligence in trying to secure the identifying information for the claim.
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Yes, you may claim both the child tax credit (CTC) and the child and dependent care credit on your return if you qualify for both credits.
- If you qualify for one or both credits, you may claim the credit(s) on Form 1040, U.S. Individual Income Tax Return or Form 1040NR, U.S. Nonresident Alien Income Tax Return.
- To claim the dependent care credit, you must also complete and attach Form 2441, Child and Dependent Care Expenses and Schedule 3 (Form 1040). The Instructions for Form 2441 explain the qualifications for the dependent care credit and how to calculate it.
- The Instructions for Form 1040 explain the qualifications for the child tax credit, the requirements for taxpayer identification numbers (TINs), and how to calculate the credit.
- Complete Schedule 8812, Additional Child Tax Credit when claiming the additional child tax credit (ACTC).
- Attach the appropriate form or schedule to your Form 1040 or Form 1040NR.
Note: If you don’t have a TIN by the due date of your return (including extensions), you may not claim the CTC/ACTC on either your original or an amended return, even if you later get a TIN. Also, you may not claim the CTC/ACTC on either your original or an amended return for a child who doesn't have an SSN by the due date of your return (including extensions), even if that child later gets one.
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If you're a U.S. citizen or resident, you may qualify for this credit if before the end of 2018 —
- you were age 65 or older; or
- you retired on permanent and total disability and received taxable disability income.
A married individual must file a joint return to claim the credit unless the individual lived apart from his or her spouse for the entire taxable year or qualifies to file as head of household.
Even if you meet the above tests, you can't claim the credit if either of the following exceeds certain amounts:
- your adjusted gross income; or
- the total of your nontaxable social security benefits, nontaxable pensions, nontaxable annuities and nontaxable disability income.
For more information, see Publication 524, Credit for the Elderly or the Disabled.
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Expenses that qualify for an education credit (whether the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit) are qualified tuition and related expenses paid by the taxpayer during the taxable year. Qualified tuition and related expenses are tuition and fees required for the enrollment or attendance of the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer at an eligible educational institution for courses of instruction. For the AOTC, the expenses must be paid in a program to acquire a postsecondary degree program. For the Lifetime Learning Credit, the expenses must be paid in a program to acquire a postsecondary degree or to acquire or improve job skills.
For the AOTC provisions, student activity fees are included in qualified education expenses only if the fees must be paid to the institution as a condition of enrollment or attendance. Expenses for books, supplies, and equipment needed for a course of study are included in qualified education expenses whether or not the materials are purchased from the educational institution.
For the Lifetime Learning Credit, student activity fees and expenses for course-related books, supplies and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution for enrollment or attendance by an eligible student.
Qualified tuition and related expenses don't include the following types of expenses:
- Expenses related to any course of instruction or education involving sports, games or hobbies, or any noncredit course (unless the course or other education is part of the student's degree program or, in the case of the Lifetime Learning Credit, the student takes the course to acquire or improve job skills),
- Student activity fees (unless required for enrollment or attendance),
- Athletic fees (unless required for enrollment or attendance),
- Costs of room and board,
- Insurance premiums or medical expenses (including student health fees),
- Transportation expenses, and
- Other personal, living, or family expenses.
An eligible educational institution means a college, university, vocational school, or other postsecondary educational institution that's accredited and eligible to participate in the federal financial student aid programs administered by the Department of Education.
Note: You can't claim the AOTC on either an original or an amended return if either you or the student didn’t have a taxpayer identification number by the due date of your return (including extensions), even if you or the student later gets one of those numbers.
Additional Information:
- Instructions for Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
- Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
- Education Credits--AOTC and LLC
- Publication 970, Tax Benefits for Education
- Am I Eligible to Claim an Education Credit?
- Education Credits: Questions and Answers
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No, expenses paid to attend a private high school don't qualify for an education credit because a high school isn't an eligible educational institution.
In general, an eligible educational institution is an accredited college, university, vocational school, or other postsecondary educational institution. To be eligible, the educational institution must also be eligible to participate in a federal financial student aid program administered by the Department of Education.
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No, you can't claim a credit for higher education expenses paid for by a tax-free scholarship.
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The lifetime learning credit is a nonrefundable tax credit with a per-family dollar limit that's available for qualified tuition and related expenses for any course of higher education, whether the student is at the undergraduate or graduate level, and for courses to acquire or improve job skills. There’s no limit on the number of years the lifetime learning credit can be claimed, and the student does not need to be pursuing a program leading to a degree.
You calculate the lifetime learning credit by taking 20% of the first $10,000 of the qualified educational expenses paid for all eligible students. For a taxpayer with high modified adjusted gross income, a phaseout may apply.
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Yes. The work opportunity tax credit (WOTC) provides an incentive to hire individuals from targeted groups that have a particularly high unemployment rate or other special employment needs.
The Protecting Americans from Tax Hikes Act of 2015 extended the WOTC for members of targeted groups hired after December 31, 2014, and before January 1, 2020. Generally, the WOTC is equal to 40 percent of the qualified wages paid to a targeted group employee who works at least 400 hours of service during his or her first year of employment with the employer.
You must obtain certification from your state employment security agency that an individual is a targeted group member before you claim the credit. Generally, you obtain certification by submitting Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit to the state employment security agency. You must submit the form not later than the 28th day after the individual begins work for you.
Newly hired individuals from the following targeted groups might qualify you for this tax credit:
- a long-term family assistance recipient,
- a qualified recipient of Temporary Assistance for Needy Families (TANF),
- a qualified veteran,
- a qualified ex-felon,
- a designated community resident,
- a vocational rehabilitation referral,
- a summer youth employee,
- a Supplemental Nutrition Assistance Program (SNAP) benefits (food stamps) recipient,
- an SSI recipient, or
- a qualified long-term unemployment recipient (for individuals who begin work after 2015)
Calculate the credit by completing Form 5884, Work Opportunity Credit with the business' tax return or on Form 3800, General Business Credit, as appropriate. See the Instructions for Form 5884 for more information.