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| An individual is physically or mentally incapable of self-care if, as a result of a physical or mental defect, the individual is incapable of caring for his or her hygiene or nutritional needs, or requires the full-time attention of another person for the individual's own safety or the safety of others. A noncustodial parent may not treat a child as a qualifying individual for purposes of the credit, even if the noncustodial parent may claim an exemption for the child. |
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If a person is a qualifying individual for only a
part of the tax year, only those expenses paid during that part of the year
are included in calculating the credit.
In addition to paying for the care
of a qualifying individual, you must meet all of the following conditions to
claim the credit: * Your payment must be made to a care provider who is not your spouse, the parent of your child who is your qualifying individual, your child under age 19, or a dependent of you or your spouse. * You must file a joint return if you are married. * You must provide the taxpayer identification number (usually the social security number) of each qualifying individual on the return on which you claim the credit. |
| You must report the name, address, and taxpayer identification number (either the social security number, or the employer identification number) of the care provider on your return. If the care provider is a tax-exempt organization, you need only report the name and address on your return. You can use Form W-10 (PDF), Dependent Care Provider's Identification and Certification, to request this information from the care provider. If you do not provide information regarding the care provider, you may still be eligible for the credit if you can show that you exercised due diligence in attempting to provide the required information. If you qualify for the credit, complete Form 2441 and Form 1040 or Form 1040A. If you received dependent care benefits from your employer (this amount should be shown on your Form W-2, you must complete Part III of Form 2441. You cannot claim the child and dependent care credit if you use Form 1040EZ. If you pay a provider to care for your dependent or spouse in your home, you may be a household employer. If you are a household employer, you may have to withhold and pay social security and Medicare taxes and pay federal unemployment tax. |
| The total expenses that may be used to calculate the credit are capped at $3,000 for one qualifying individual. The expenses qualifying for the computation of the child and dependent care credit must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from gross income. In general, you can exclude up to $5,000 for dependent care benefits received from your employer. The expenses qualifying for the computation of the credit must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from gross income. In general, the expenses claimed may not exceed your earned income or your spouse's earned income, whichever is less. |
| For purposes of the child and dependent care credit, a qualifying individual is your dependent qualifying child who is under age 13 when the care is provided. Your qualifying individual can also be your spouse who is |
| Copyright © 2014 [Hera's Income Tax School]. All Annual Federal Tax Refresher Course rights reserved. |
| Revised: 05/28/15 |
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