Qualify for Child and Dependent Care Tax Credit – Phase Out Form

Child and Dependent Care Tax Credit – Phase Out Form

Child and Dependent Care Tax Credit

The child and dependent care credit is available to working parents and guardians who pay for child care services for a child under 13 or a disabled dependent of any age. Individuals may be eligible for a federal tax credit of up to 35% of the amount paid for day care. The actual credit varies according to the adjusted gross income, AGI of the tax payer. You can find the tax chart and other instructions on publication 503. The tax credit reduces the federal income tax you have to pay and you can use the money freed for other expenses. You can get child and dependent tax care credit up to $6000. Here we will check child and dependent care credit income phase out guideline.

Eligibility for the Child and Dependent Care

In order to qualify for the child and dependent care credit, you have to satisfy following criteria:

  • The dependent child must be of age 12 or younger, or an adult dependent of any age. An adult dependent means a person who is physically or mentally unable to take care for the self.
  • The care must be provided by a qualifying person.
  • You and your spouse, if you are married, must have earned income from salary, wages, self-employment etc for the tax year.
  • The service of the care provider must enable you to work or look for the work.
  • The care benefits provided by your employer must be reduced from the qualified expenses that you deduct or exclude from your income.
  • You have to identify the care provider on your tax return. Your spouse or parent of the qualifying person or your dependent can’t be a care provider. You must report care provider information such as name, address, social security or employee number on the IRS Form 2441.
  • The qualified dependent must have lived with you for more than half of the year, except in case of birth and death.

Qualifying expenses for the child and dependent care credit

  • IRS considers various expenses paid for child and dependent care as qualifying expenses. Some of them are:
  • Cost paid for nursery schools and kindergarten
  • Day camp or summer camp program expenses that include camps centered on a sport or activity if the camp was considered for providing care while the parent or parents were at work. Overnight camps are not qualified.
  • Amount paid to authorized license holder dependent-care centers.
  • Pay to private home nurses.
  • Cost for households needs when services are required to provide protection.

If you have a child or a dependent adult, you can get the tax credit for the expenses made towards providing care to them while you are away at work and reduce the tax to be paid!

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