WHO QUALIFIES A TAXPAYER FOR THE CHILD AND DEPENDENT CARE CREDIT?

Childcare or adult dependent care can be a major expense. Fortunately, the child and dependent care credit can provide some relief.

According to the IRS, taxpayers who pay for daycare expenses may be eligible to claim up to 35% of what they spend; limits apply.

How does the IRS define a qualifying person?

For the purposes of this credit, the IRS defines a qualifying person as:

• A taxpayer’s dependent who is under age 13 when the care is provided.
• A taxpayer’s spouse who is physically or mentally unable to care for themselves and lived with the taxpayer for more than half the year.
• Someone who’s physically or mentally unable to take care of themselves and lived with the taxpayer for six months and either:
  1. The qualifying person was the taxpayer’s dependent or
  2. They would have been the taxpayer’s dependent except for one of the following:
     • The qualifying person received gross income of $4,200 or more
     • The qualifying person filed a joint return
     • The taxpayer or spouse, if filing jointly, could be claimed as a dependent on someone else’s return

Taxpayers can use the Interactive Tax Assistant on IRS.gov to determine if they can claim this credit.

More information can be found on the IRS website:

• Child and Dependent Care Credit
• Publication 503, Child and Dependent Care Expenses

If you have dependent care expenses and are not sure how this credit may apply to your specific tax situation, contact our office for more information.