The Child and Dependent Care Credit helps you recoup some of the money you spend on child or other dependent care throughout the year. This is a non-refundable tax credit, which means that you can use it to lower your overall tax bill, but you cannot get any money directly from the government. Filing for the credit is quick and relatively simple.Know More
Children must be under the age of 13 in order to qualify. Those over the age of 13 must be dependents who are incapable of taking care of themselves due to mental or physical restrictions.
Care that was provided while you and your spouse worked, looked for work or went to school full-time qualifies. If either of you was a stay-at-home parent that wasn't seeking work or going to school full-time, then you aren't allowed to take the credit. Care that was provided while you ran errands or went to the movies doesn't qualify.
You need to give the IRS the information of your care provider on the tax form. This includes name, address and tax identification number.
You receive a percentage of the amount that you spent for care, up to a certain dollar amount. The percentage is 20 to 35 percent, depending on your income. As of 2013, you can claim up to $3,000 in expenses for one dependent or up to $6,000 in expenses for two or more dependents.
Couples who are married filing jointly, single persons claiming head of household and widowers can claim the credit. You cannot claim the credit if you are married and filing separately unless the IRS considers you unmarried, which is true in cases of legal separation or married people who live apart for more than half the year.
The Childcare Voucher Scheme is an initiative by the British government to help working parents benefit from tax breaks to save money on child care, according to Wikipedia.org. The Guardian reports that starting in 2015, parents can buy vouchers online to pay for child care.Full Answer >
The amount of money foster care providers receive is determined mainly by the child's age. For example, in 2014, Wisconsin provides a monthly amount of $375 for children under 4, $410 for children from 5 to 11, $466.00 for children 12 to 14 and $487 for children 15 and over.Full Answer >
In some cases, an attempt to claim a child as a dependent when another person has already claimed him results in rejection of the electronic submission, according to About.com. If the IRS accepts the return or the second parent mails a return claiming the same child as a dependent, the IRS is likely to require an audit over dependents.Full Answer >
A dependent of a taxpayer is typically either a child who still lives at home or a relative for whom he provides over half of the necessary financial support. Each dependency exemption claimed is worth a $3,950 deduction as of 2014.Full Answer >