One of the most expensive parts of caring for a child is paying for childcare. Luckily, the IRS has an option that one may qualify for to get some of that expense back. This is called the Child and Dependent Care Credit. There are several things that you need to know before you file your taxes if you are hoping to claim credit for any expenses.
1. The child you paid childcare for must be twelve years of age or younger. The only exception to this is if you have an older child or adult that is incapable of caring for themselves due to a mental or physical handicap.
2. Daycare must have been used only so you, or your spouse could go to work. If you are unemployed, you can claim daycare expenses for times that you are searching for employment. The IRS will expect to see earned income from wages or self-employment if you file a claim of dependent care expenses.
3. Daycare cannot be done by a family member or a person under the age of 19. If you use a family member or a teenager, then you cannot claim the expenses on your taxes.
4. The child being claimed must have lived with you for more than half the year. If you are sharing custody with the other parent, then you will be able to claim the child on your years of eligibility.
5. You can only claim 35 percent of the expenses for the year. These expenses must not include any amount that your employer covers.
It is possible to see some of the money that you put out for your children to come back. When you work, caring for your child needs to be done by someone else and the amount adds up quickly. Talk to a tax preparer to ensure that you are claiming the proper amounts for the Child and Dependent Care Credit.