The information in this article is up to date for tax year 2023 (returns filed in 2024).
Who’s going to watch the kids while I go to work? That’s the million dollar question many parents ask themselves at the end of every school year. While kids look forward to spending their summer sleeping in, hanging out and staying up late, parents dread the idea of their kids tearing up the house or roaming the streets while they’re away. Why not pay someone to help? Not only will you be able to keep your sanity, but your expenses can be used to claim the Child and Dependent Care Credit on your next tax return. With ezTaxReturn, you can file on any device in 30 minutes or less.
How does the Child and Dependent Care Credit work?
If you pay to send your child to day camp, daycare or someone comes to watch them while you go to work, you can deduct up to $3,000 of expenses on your tax return. If you’re footing the bill for two or more kids, the limit rises to $6,000. You can claim any childcare expenses paid during the year but the kids must be under 13 years old. Depending on your income, the credit is worth 20-35% of your expenses.
With the unemployment rate standing at 3.7 percent in January, clearly not everyone has a job. The good news is you can still qualify if you’re paying for someone to take care of your kids while you go on interviews. The catch is that you have to make some money before the end of the year.
To claim the expenses on a joint return, your spouse has to be working, looking for work or enrolled somewhere as a full time student. Spouses who are physically or mentally unable to care for themselves automatically qualify.
Not all types of care were created equal
The following types of care don’t qualify for the credit:
• Overnight camp or summer school tutoring costs
• Care provided by your spouse, the child’s parent or one of your kids who’s under 19
• Care given by someone you claimed as a dependent
What information do I need from childcare provider?
Make sure you know the name, address and taxpayer ID number for the care provider because you won’t be able to cash in without it. If you file with ezTaxReturn, you’ll be asked a series of questions to make claiming your credit fast and ez.
The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
