If you’re a tax payer and you are paying somebody to care for your child, then you are eligible to file for a child care credit. However, make sure to meet the pre-requisites and qualifications provided by the IRS.
Here are steps for you to follow in filing Child Care Credit:
1. Determine the qualification
The child must be thirteen years of age and below and someone who’s incapable of sustaining or caring for him or herself. The care expenses must also be intended for children (not beyond thirteen years old), who are physically and mentally incapable of taking care of themselves. He or she should be confirmed and should be duly recognized as your dependent and a qualified individual living at home with you when these expenses were incurred.
2. Comply for the Requirements
For you to claim the child care credit, you must first file income taxes using Form 1040 (Individual Income Tax Return) or Form 1040A (The Internal Revenue Service). For married couples, both must be earning an income, except for a disabled spouse or a full-time student who is not earning an income. You should also acknowledge that you can’t claim anyone as dependent to have a child care provider.
3. Determine your expenses
Compute how much was paid to the following: child care center, nursery school or kindergarten, after-school care or activities, day camps and total cost paid to someone who gave care at home including his or her meals, transportation and housing. Be sure that you will not include the cost you paid for a child unless he or she is over eighteen years of age, or money paid is not given to anyone who is dependent.
4. Fill out 2441
To file officially for a child care provider, filling out of 2441 form is the primary method. Identify the care provider’s name, address, identifying number or social security number or EIN, and the amount you paid.
To determine the child and dependent care credit, you have to compare your adjusted gross income first (line 7) with the chart (line 8) to get the percentage of eligible expenses. Thirty is the maximum percentage of 10(k) and twenty for over 28(k). Just multiply the number on line six with percentage on line eight.
5. Exemptions in 2441
In filling line 3 of Part 2 of 2441, don’t forget that the total line cannot be more than four thousand eight hundred dollars. Thus, don’t include more than $2,400 for a qualified person when adding the costs you paid in expenses for the qualified persons.
For spouse’s earned income where your spouse is disabled or full-time student, put $2,400 as earned income for the qualifying person and just double the amount of $2,400 if you had two or more respectively.
Child Care Credit is truly helpful for someone like you to gain financial assistance for waging someone to give care for a qualified individual. You must only abide with the rules of IRS and meet the Child Care Credit standards for you to get it. Also, be honest in filling out your 2441 form.