Individuals who pay daycare expenses for children or adult dependents may be eligible for Child and Dependent Care Credit
Drums, PA -- (SBWIRE) -- 02/19/2013 -- The Child and Dependent Care Credit is up to 35% of the amount of their yearly expenses. The percentage is dependent upon your gross earnings. In order to qualify, you must fill out the form 2441.In general, you can claim the credit up to $3,000 worth of qualifying expenses for one child or dependent, and $6,000 if the care is for two or more.
If your employer provides day care, or a plan that reimburses you for day care expenses, you can exclude this from your income up to $5,000 per year. It is required that you meet the criteria above, and that you file Form 2441 with your return for that year, to elect the exclusion. Child care expenses for which you were reimbursed do not qualify for the credit explained above.
To qualify for the credit you must have a child under the age of 13 years old who is currently in daycare or an adult dependent who is unable to care for themselves alone. If your child is 13 years old or older, you must prove that they are physically and/or mentally unable to perform tasks without the assistance of another person.
You also have the option to use this credit for a spouse who is mentally or physically unable to care for himself or herself. “The disability must be verifiable with a proper diagnosis, no matter what it is.” explained Paul Stanley of eTax.com “Qualifying for this credit, as long as you are being truthful, is beneficial and takes some of the stress away financially due to the costs paid each year for their care.”
Those you claim as dependents must live with you. Children that are in your care, but not yours cannot be claimed.
It is important you are able to work, which is why this credit exists. It gives you the opportunity to be able to work and be reimbursed for part of the year’s cost for child/dependent care. Parents and caregivers of dependents are given the opportunity to qualify for this credit to recoup some of the expenses incurred throughout the year.
The credit may not seem like much, but it will help to give your return a nice little boost.
For more information and to see if you're eligible for Child and Dependent Care Credit visit http://www.etax.com/help/doc/what-is-child-care-credit.htm
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