On this past year's taxes, you may be able to claim some of your childcare expenses. The childcare and dependent credit is in place to give taxpayers who have to pay for childcare a little break.
Who Qualifies As A Dependent
You can only claim 'qualifying individuals' whom you paid care expenses for on your taxes. In less technical terms, 'qualifying individuals' means any of your kids who were under the age of thirteen last year.
If your child turned thirteen during the past year, you can include any childcare expenses you paid for them up until their birthday. Any childcare expenses that you paid for your child after they turned thirteen cannot be included for tax purposes.
If someone is helping you prepare your taxes, you will have to provide them with the names of your children as well as their social security numbers.
What Type of Childcare Qualifies
Only childcare that you used while you were at work qualifies for the child work credit. Other times you may have used childcare cannot be included. For example, childcare hours accrued while you were running errands or enjoying a date with your spouse cannot be included in your childcare total. It is important to only include childcare that was for work-related purposes.
Your childcare provider should be able to provide you a tax form that details all of the hours your children were in their care. Make sure that the form includes the childcare's employer identification number.
Your Work Record
You have to have worked during the 2014 calendar year to qualify for the childcare credit. That means you need to have a W2 if you worked for an employer, or evidence of income if you were self-employed in 2014.
The amount you claim in childcare expenses cannot exceed your income. For example, if you made $30,000 dollars last year, you cannot claim more than $30,000 in childcare expenses.
If you are married and filing your taxes together with your spouse, you can only claim childcare expenses that do not exceed the lesser of your incomes. For example, if you made $5,000 last year, and your spouse made $50,000, you can only claim up to $5,000 for childcare expenses.
If you have children, make sure that you talk to a tax accountant or CPA, such as the experts at Knowledge Integration Solutions, about qualifying for the child care tax credit. It could save you significant money on your taxes. Be sure to bring your children's social security numbers and your tax statement form from your childcare provider to your tax session.Share