Requirements to receive up to $6,000 Child and Dependent Care Credit
Parents and guardians can claim a tax credit worth thousands of dollars to help cover the cost of care for children and other relatives.
Tax filing season can be a stressful time but, with a majority of filers expected to receive a refund, it can be a lucrative time if you take advantage of the various tax credits on offer.
The Child and Dependent Care Credit is designed to ease the burden of childcare for working people. If you have to pay to ensure a child or dependent is looked after while you are at work, you will most likely be able to claim the credit.
For the 2022 tax year parents and care-givers can claim the tax credit to cover employment-related expenses worth up to $3,000 per dependent, up to a maximum of $6,000. The total amount of the credit cannot exceed 20-35% of your expenses, depending on your income level.
What are the requirements for the Child and Dependent Care Credit?
The eligibility requirements for the Child and Dependent Care Credit can be divided into three groups: conditions for the filer; requirements for the subject of the claim; and limits on who is able to provide care under the program.
Firstly, the eligibility terms for filers who wish to claim the credit:
- Filer must have earned income i.e. earnings from a job, rather than an investment
- Care must have been paid for to allow you to work or search for a job
The next set of requirements relates to the child or dependent who can be the subject of the claim.
A claim can be made on behalf on any of the following groups:
- Children aged 12 or younger at the end of the year for which the claim is related
- A spouse who is unable to care for themselves, who also lived in your home for at least half of the year
- Any tax dependent who is unable to care for themselves, who also lived in your home for at least half of the year
Finally, to receive the Child and Dependent Care Credit the child care provider must satisfy the following conditions.
The care-giver to whom you paid the money may not be any of the following groups:
- Your spouse
- A parent of the child
- Another of your tax dependents
- Your own child aged 18 or younger
For more information on the credit and answers to any queries you may have, head over to the IRS’ Child and Dependent Care Credit help page.
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