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Taxes - Childcare Tax Credit

By Edited Nov 13, 2013 0 0

There are tax credits that you may be eligible for if you have a child at home that attends daycare. Yes, it is that time of the year that we all unfortunately have to think about filing our taxes, and the Child Care Tax Credit is one of those many deductions that can save you some money this year. As any parent knows, the cost of daycare has skyrocketed over the years, and the deduction is a much needed asset to return some of those hard earned dollars back into your budget. If you have more than one child under 13 then that is even better. So, here is how it goes.

First of all, you and your spouse both have to be employed to receive this tax credit. One of the only was around this condition is if one of you work, look for work, or if you or your spouse attended college full-time for at least five months out of the year. The only other reason is if one of you didn't work due to a mental or physical disability and needed help with day to day activities.

If this is your situation then you are in luck, however the dependent must be a qualifying individual under certain terms. One reason is that the child is under the age of 13 when the care was provided and that they meet the criteria as a qualified child. Another reason is that your spouse or dependent had the same residence as you when they were receiving care ,and they were physically or mentally incapable of caring for themselves. The only time that this does not apply is if they had an gross income greater than or the same as the exemption, filed a joint return, or was a dependent of someone else that is a taxpayer. Non-custodial parents cannot file this exemption on their taxes.

If all these circumstances apply to your situation there are a few more things that you will need to provide, and a few more conditions that you must meet. To file the Childcare Tax Credit you will need to provide the social security number of that individual. If you are married then you must file a joint return. Furthermore, the provider must provide their name, address, and taxpayer identification number unless they are tax exempt, and they cannot be your spouse, dependent under the age of 19, or the child's parent.

When you file your taxes, the childcare tax credit form is 2441 that you need to include with your tax form. You must use a 1040 or a 1040A when filing your taxes in order to receive this credit. If you receive employer or other benefits for your child or dependent, other rules may apply. To find out more you should go to the IRS website. These are just general rules to get you started. Your tax service provider should be able to tell you more, and they will be up to date on any new tax laws associated with the Childcare Tax Credit.

You can read more of my tax articles here:

Free Tax - Get Free Services and Help with Your Taxes

Taxes - Earned Income Credit

Taxes - Adoption Credit

Claim Tax Credits - Age Limits for Claiming Dependents

Taxes - The Lifetime Learning Credit

Free Tax Filing - This Tax Season Offers More Choices


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