Ensuring that you have adequate care for your children when you have to work can really put a damper on your budget. This type of expense may be deductible through the Child and Dependent Care Credit, which is a tax credit available to working parents. This credit can save you Up to $3000, which is deducted from your total taxable income amount. The credit may even double if you have more than one eligible child being provided with care. That great thing is that this credit isn\u2019t only for children under the age of 12, but can also apply to dependent adults.<\/p>\n
Qualifying Child <\/u><\/strong><\/p>\n You can deduct up to 35% of your qualifying expenses, capped at $3,000 for one child ($6,000 for two or more dependents). However, the credit is reduced for taxpayers with higher incomes. The 35% threshold applies to those with an adjusted gross income below $15,000. As your AGI increases by $2,000, the credit percentage is lessened by 1%. For taxpayers who gross $43,000 or more, the credit is worth 20% of qualifying expenses.<\/p>\n It\u2019s important to know that if your employer reimburses you for the care of your dependent while you work, the credit amount you are entitled to will be reduced by your reimbursement. For example, the maximum allowance for dependent care is $3000, but your employer had the benefit plan that a lot you $500 each year for care of your dependents. The amount of your maximum credit after your reimbursement is $2,500.<\/p>\n Dependent children under the age of 13 generally qualify as long as they meet certain criteria:<\/p>\n Qualifying Adult<\/u><\/strong><\/p>\n There are some circumstances where you may have a qualifying adult dependent for which this credit can be claimed. If you have a spouse or relative who cannot care for themselves, and they reside with you for over half the tax year, you may be able to deduct qualifying expenses. Programs like an adult day-care typically qualify.<\/p>\n","protected":false},"excerpt":{"rendered":" Ensuring that you have adequate care for your children when you have to work can really put a damper on your budget. This type of expense may be deductible through the Child and Dependent Care Credit, which is a tax credit available to working parents. This credit can save you Up to $3000, which is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[123,120],"tags":[294,305,71,244],"class_list":["post-665","post","type-post","status-publish","format-standard","hentry","category-deductions-2","category-dependents-2","tag-dependent-care","tag-dependent-care-credit","tag-dependents","tag-qualifying-child"],"yoast_head":"\n\n