7 Criteria for Claiming a Child Care Credit

Summer months are difficult for working or looking-for-work parents. The good news is that tax credits are available for the cost of care, including day camps, for dependents such as a child or children under age 13. You probably qualify if you can answer ‘yes’ to the following 7 questions:

  1. Are you responsible for the care of one or more qualifying persons? ‘Qualifying persons’ are:
    a) your dependent children under age 13 when care is provided
    b) your spouse or another qualifying relative who is not physically or mentally able to care for himself or herself and lived with you for more than half the year in which you claim the credit.
  2. Do you pay expenses that allow you to work or look for work? Qualifying expenses include home care, day care, or day camp. Overnight camp expenses don’t qualify.
  3. Do you and your spouse have any earned income during the year from wages, salary, tips, and/or unemployment benefits?
  4. If your spouse is not working, is he/she a full-time student or incapable of self-care?
  5. Do you pay someone OTHER than
    a) a person you or your spouse claim as a dependent or
    b) your spouse or the parent of your qualifying child under age 13 or
    c) your child who is under age 19 at the end of the year?
  6. Do you file a joint tax return, or are you legally separated or living apart from your spouse?
  7. Do you have receipts and/or a record of the care provider’s name, address, and identifying number (Social Security or EIN)?

If you qualify for the tax credit, here’s how to figure what the credit is worth to you:

  • The total expense limit per year (not just summer) is $3,000 for one qualifying person, or $6,000 for two or more.
  • The credit amount is 20% to 35% of your allowable expenses, based on your income.

Contact one of our tax specialists if you have questions about the credit or how to qualify.