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Understanding the Child & Dependent Care Tax Credit

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Childcare is perhaps the steepest monthly expense many families can not shy away from. Parents or custodians are left with no choice than to pay for daycare for their infants or disabled adults under their care. However, families who are struggling to keep up with this ever-increasing bill can get a bit of respite from the IRS according to a recent post by the National Tax Reports. The post sheds light on the child and dependent care tax credit and how taxpayers can take advantage of this credit to cover the cost of their childcare.

The Child and Dependent Care Credit can cover a percentage of daycare costs up to a maximum of $3,000 for one dependent and it is capped at $6,000 for two or more dependents. This percentage can range from 20% to 35% of the taxpayer’s adjusted gross income. National Tax Report recommends using a free dependent online calculator to quickly estimate your credit amount. The online software will only ask simple questions about your family so as to ascertain who qualifies as a dependent on your tax return to help you get the biggest tax return.

There are just a few basic requirements to be met in order to qualify for the child and dependent care tax credit. First off, taxpayers must have a dependent child less than the age of 13 or an older child who is physically or mentally unable to care for himself due to disability. The purpose of paying child care for these dependents must be to allow both parents to work or get a job or attend school on a full-time basis. It is also expected that both parents must have earned income either from a job or through self-employment. The only exception to this is if one of the parents is disabled and incapable of caring for another person.

There are also rules concerning daycare. The person providing the daycare must not be listed as a dependent of the taxpayer. Summer day camps qualify as providers while overnight camps do not qualify. This is because the IRS does not think an overnight camp as a form of work-related expense.

For more information about the Child and Dependent Care Credit, please visit, https://nationaltaxreports.com/eligible-for-child-dependent-care-tax-credit/

Claim your Child and Dependent Care Tax Credit Today with H&R Block

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Paying for child care or adult dependent care is one of the costly monthly expenses many families face. But without care, your children can’t leave home to earn a living or go to school. Child and dependent care tax credit is a tax break you can grab if you paid for day care, summer camp or a sitter.

Childcare expenses keep rising and are approaching the cost of college tuition. By claiming your child and dependent care tax credit with H&R Block, you might be able to get back some of the money you spent on childcare expenses. H&R Block child and dependent care tax credit service is designed ultimately for individuals working with dependents to help offset the cost associated with going to work every day. You can also qualify if you cared for disabled dependents or spouses.

As working parents, child and dependent care tax credit can help you pay expenses for the care of your children, adult dependents or an incapacitated spouse. You can claim up to $3,000 in dependent care expenses for one child/dependent and $6,000 for two children/dependents per year. Child and dependent care tax credit is non-refundable; meaning that if a family does not earn enough money to owe federal income taxes, it cannot get a tax refund from the credit.

There are certain qualifications you have to meet in order to qualify for the child and dependent care tax credit. You must have at least one dependent child or adult who cannot provide their own care, you must be working and receiving an income, the child must be your dependent and under the age of 13, the child must also live with you at least half the year in the case where custody is split between parents or guardians, and the daycare center must be a qualifying provider for the credit.

Claiming your child and dependent care tax credit with H&R Block offers extraordinary experiences. H&R Block’s online tax filing services can efficiently import your W2 information into your tax return so you can avoid worrying about your forms being delivered via snail mail.