Save your summer or day camp receipts and paperwork this year! According to Tax Principal Laura Da Fonseca, you may be eligible to take advantage of the nonrefundable Child and Dependent Care Tax Credit when filing your 2019 tax return, if you pay for someone to care for a child, dependent or spouse in 2019. The tax credit is worth between 20 % and 35% of allowable expenses (i.e. the cost of the camp or care), based on your income. Allowable expenses have a limit of $3,000 for care of one qualifying person and $6,000 for the care of two or more persons.
- Children under the age of 13, or a spouse or dependent who is physically or mentally incapable of self-care and has lived with the taxpayer for more the half the year qualify.
- The credit is available to the custodial parent.
- Special rules apply for people who get dependent care benefits through their employer. See Form 2441, which must be filed with your tax return.
- Families with special circumstances may also be eligible for the tax credit. See IRS publication 503, Child and Dependent Care Expenses to learn more.
- The tool IRS Interactive Tax Assistant is available to help you determine if you are eligible to claim the tax credit.
What are the restrictions?
- The taxpayer must use the camp so that they can work, or look for employment. If married, this also applies to your spouse, unless the spouse is disabled or a full-time student.
- The taxpayer and their spouse (if married filing jointly) must earn income for the tax year in which you are filing your return. Special rules apply to those with a spouse who is disabled, or a full-time student.
- The childcare provider cannot be the taxpayer’s spouse, dependent or child’s parent.
- Overnight camp does not qualify.
What do I need?
- You need to include the name, address, and taxpayer identification number of the care provider on your tax return, so be sure to keep your paperwork.
For more information, please contact us at 401-831-0200.