With the end of summer and start of the school year, determining what expenses qualify for the Child and Dependent Care Credit can save you money come tax time. The Child and Dependent Care Credit applies to expenses incurred for the care of a child, spouse, or dependent while you (and spouse if filing jointly) are working, searching for work, or attending school. The credit can apply to summer camp, day care, and/or any combination of care necessary for the care of your qualifying dependent. The credit allows for $3,000 for one qualifying dependent and $6,000 for two or more qualifying dependents (income limits apply). By applying the credit, you reduce the amount of federal income tax that is owed.
Many expenses are considered a qualifying expense. Examples include child care, babysitter, before and after care, summer camps, and household services. Refer to Publication 503, Child and Dependent Care Expenses, for detailed information.
Below is a list of things to consider if you want to apply the credit to your income tax return (as detailed by the IRS):
In order to claim the Child and Dependent Care Credit, complete Form 2441, Child and Dependent Care Expenses along with your Form 1040 or Form 1040A, U.S. Individual Income Tax Return. Refer to Publication 503, Child and Dependent Care Expenses, for detailed information on the Child and Dependent Care Credit.
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