Working parents juggle work, kids and day-to-day responsibilities, all while trying to

balance their finances. To cut down on the costs of child care, parents can use the

Child and Dependent Care tax credit to reduce their tax bill.

Care Services Eligible for the Credit

• Private home nurses

• Nursery school and kindergarten costs

• Household help as long as the services are necessary for the

well-being and protection of the qualifying

individual

Credit Limits

Remember, the Dependent and Child Care credit probably will

not cover for all of your child care costs. You can only claim up

to $3,000 for one dependent and up to $6,000 for two or more.

The Percentage Restrictions

The second limit is the percentage of costs that you can claim. Once

you determine your allowable expense amount, your actual credit is

limited to a percentage of that figure. The percentage amount is

based on your income. Low-income taxpayers can take a credit of 35

percent of allowable care costs, while those who earn more than

$43,000 a year can only take 20 percent.

Defining Dependents

If you pay for child care, you can claim this credit to help

offset some of your costs as long as the child meets IRS

guidelines. The child must be younger than 13 years old, be

related to you and live with you most of the year. Be sure to

consult the guidelines carefully before using this

credit.

Only Working Taxpayers Need Apply

Another important requirement to consider before using this

credit: you must be working or actively seeking a job. The

Dependent and Child Care credit is intended for taxpayers who

pay for child care in order work or look for work.

www.taxassistancegroup.org

(855) 549-7829

Source: Bell, Kay. “IRS can help you look after the kids.” Bankrate. Bankrate, Inc. 17 June 2015. Web. 31 August 2015.

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