The Child and Dependent Care Credit is a nonrefundable tax
credit based on expenses incurred for the care of a qualifying
person. This care must make it possible for you to work or to seek
employment. This credit is based on a percentage of the amount
actually paid for care expenses.
Qualifying expenses are incurred for the well-being and
protection of a qualifying person.
The expenses must be to provide care for a qualifying person and
must be work-related. Work-related care expenses are defined as
expenses incurred for the care of the qualifying person while you
are working or looking for work.
If you are married, both you and your spouse must work or look
for work. For more information see Earned Income.
Qualifying expenses include:
For purposes of the Child and Dependent Care Credit, earned
A spouse is treated as having earned income for any month he or
she is a full-time student or is physically or mentally unable to
care for himself or herself.
A student is considered full time if they are enrolled and
attend school for the number of hours or classes the school
considers full time. You must have been a student for some part of
five calendar months during the year. "School" includes elementary,
junior and senior high schools, colleges, universities, technical,
trade, and mechanic schools. Schools offering courses only through
the Internet are not considered a "school" for this credit.
All persons or organizations providing child or dependent care
must be identifiable. In order to identify the care provider you
must supply the provider's name, address and taxpayer
If the provider is an individual, his or her Social Security
Number or Individual Taxpayer Identification Number is
If the provider is an organization, the Employer Identification
Number (EIN) is acceptable.
If the provider is a tax-exempt organization (church, school,
etc.), it is not necessary to provide identification - you
may enter "TAX-EXEMPT" in place of the identifying number on Form
If you cannot provide all of the information or the information
is not correct, you must provide proof of due diligence. For the
purpose of provider identification, due diligence can be shown by
obtaining and keeping the provider's completed Form W-10, a copy of
the provider's Social Security card, driver's license (if it
includes the Social Security Number), Form W-4 (if the person is a
household employee), or a letter or invoice from the provider
showing the necessary information.
If the provider refuses to supply you with identification
information, you should report the information you can obtain at
the bottom of the form you use to claim the credit (Form 2441). On
the bottom of the second page of Form 2441, explain the information
was requested but refused by the provider.
Child and dependent care expenses are limited to $3,000 for one
qualifying person, and $6,000 for two or more qualifying
The total child and dependent care expenses claimed cannot
exceed your total earned income for the year.
The credit is equal to 35% of the maximum qualifying child and
dependent care expenses. This rate is reduced by 1% for each $2,000
your adjusted gross income exceeds $15,000, but is not reduced
The total child and dependent care expenses claimed must be
reduced by Dependent Care Benefits you received from your employer.
Employer-provided Dependent Care Benefits are reported in box 10 on
To claim the credit, complete Form 2441 and attach the form to
your Form 1040 or Form 1040A.
For more information see IRS