In general, if you pay someone to care for a child or a dependent so you can work, you may be able to reduce your federal income tax by claiming the Child and Dependent Care Credit on your federal tax return.
Qualifications for the child and dependent care credit
You must meet several criteria to qualify for the Child and Dependent Care Credit. To qualify, you must meet all of the following:
- You (and your spouse, if you are married filing jointly) must have earned income for the tax year.
- You must be the custodial parent or main caretaker of the child or dependent.
- The child or dependent care service for the summer must have been used so that you could work or look for employment.
- Your filing status must be single, head of household, qualifying widow or widower with a dependent child, or married filing jointly.
- Your child or dependent must be under 13 years.
- The childcare provider cannot be your spouse or dependent or the child's parent.
Since every family is different, the IRS has a series of exceptions to the rules in the qualification process. These exceptions allow a greater number of families to take advantage of the credit.
- For divorced or separated parents, the custodial parent (the parent with whom the child resides for the most nights out of the year) can claim the credit even if the other parent has the right to claim the child as a dependent due to the divorce or separation agreement.