The Child and Dependent Care Credit (this should not be confused with the similar-sounding Child Tax Credit) can reduce your tax bill if you paid for a dependent’s care so that you could work or look for work.
What Is Your Best Chance To Qualify For This Credit?
- You (and your spouse, if filing jointly) must have earned income.
- You paid caregiving expenses so that you (and your spouse, if filing jointly) could work or look for work
- You paid a caregiver to care for a Qualifying Person.
- You can’t file with the Married Filing Separately filing status (except under certain circumstances)
- You must furnish the care provider’s name, address, and (unless it’s a tax-exempt organization) their SSN, ITIN, or EIN on your return.
The credit is worth anywhere from 20% to 35% of your qualified expenses, up to $3,000, (for one qualifying person), and $6,000 (for two or more qualifying persons). Your percentage depends on your AGI, with the higher percentages applying to lower incomes and vice-versa.
We can help you determine your eligibility and calculate the maximum credit allowed, visit our office today to talk to our Generational Wealth Specialist.