What is deductible?
20 to 35% of qualified un-reimbursed expenses with a maximum amount of $3,000 for one person and $6,000 for two or more qualifying persons.
How it works
To receive the credit you must;
- Have a dependent under the age of 13 or have a spouse or dependent who is physically or mentally unable to care for themselves
- Have earned income (wages) to support the dependent
- The expenses allow for care while you work or look for work
- Have qualified expenses
- Financially support and maintain a home for the dependent
- If married, both you and your spouse must be working or looking for work.
Some summer-time tips
- Daycare expenses are the most common qualifying expense for the Dependent Care Credit.
- In-home daycare during the summer months also qualifies. Your sitter cannot be a dependent, a spouse or someone under the age of 19.
- Day camps qualify for the credit.
- OVERNIGHT camps and summer school/tutoring do NOT qualify
- Track the mileage of qualified transportation to and from any qualified activity. For instance, if your daycare provider takes the kids on a field trip, the mileage would be part of the qualified activity.
- Even cooking and housekeeping expenses can count if at least partly for the protection and safety of a qualifying person.
- Placing your child in a day camp while one of you volunteers at a charity would not work in determining qualified dependent care expenses.
Don’t forget to get the provider’s name, address, and Social Security Number/Tax ID number. Also retain and receipts and canceled checks to support your proof of payment. This information will be required when you fill out your tax return.