It can be expensive to hire a professional to care for a disabled adult or to pay for childcare services for children under 13. Fortunately, the government has a tax credit to reduce these costs and put more money in your pocket. The child and dependent care credit can put up to 35 percent of the costs you incurred in your hands throughout the year. What are the requirements for eligibility? To qualify for this tax credit, you must have a dependent child under 13 years of age who has received paid child care services. You can also qualify if your dependent is over 12 years of age, but has a physical or mental disability that impedes self – care. In such cases, you will have to prove that your dependent is unable to take care of himself. You will have to obtain evidence that you have been given the opportunity to work for income or to seek employment due to childcare. If benefits are offered by the employer, the benefit amount must be deducted from the total credit claim.
In order to qualify for child and dependent care credit, the dependent must have lived in your home for more than 6 months a year. In addition, you must have supported the child or adult dependent by paying more than half of their shelter costs. In the case of divorce, parents who do not have full custody can still claim to be dependent on the child. In such situations, even if the child is not claimed as a dependent, the parent who houses the child can still file with the child care credit. To claim the credit, the care provider must comply with certain criteria. When filling out the IRS Form 2441, you are often required to provide specific information about the caregiver, including but not limited to their name, address, company name (for those working in a company) and tax identification number (either a social security number or an employee identification number).