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. Read more about it.

1. 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.

2. 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

3. 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.

4. 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.

5. 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.

6. 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.

7. 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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