Seven Key Facts about the Child and Dependent Care Tax Credit

The Child and Dependent Care Tax Credit can help offset some day camp and daycare expenses for your children. If you paid for the care of a dependent in order to work or look for work, you may be able to claim the credit. Below are seven key facts you need to know about the credit:

  1. Children must be under age 13 in order to qualify.
  2. Taxpayers may qualify for the credit if the childcare provider is a sitter at home or a daycare facility outside the home.
  3. Taxpayers may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals to figure the credit.
  4. Depending on income, the credit can be up to 35 percent of qualifying expenses.
  5. Expenses for overnight camps or summer school/tutoring do NOT qualify.
  6. Individuals should save receipts and paperwork as a reminder when filing their tax return. They should also note the Employee Identification Number of the camp or sitter, as well as its location and the dates attended.
  7. Taxpayers who take advantage of pre-tax contributions to Dependent Care FSA plans through their employer must reduce expenses eligible for the Dependent Care Tax Credit.