In last week’s blog we listed (or itemized) deductible expenses that you can take against your total income on your tax return. But there are other expenses that can be claimed, that out would be a tax credit, which would go against directly any income tax liability that you have. Of course if you do not have any income tax liability, then you cannot generally claim these types of tax credits (unless they are “refundable” tax credits).

One such popular tax credit is the child and dependent tax credit, for hiring a babysitter, nanny, and/or paying for a daycare center to watch and take of your kids (and/or any other dependent), while you work during the course of the day. The requirements of claiming this tax credit are:
• The person that is being cared for is either “qualifying child”, who is under the age of 13; a dependent of yours who is physically and/or mentally unable to care for himself/herself; or your spouse who is physically and/or mentally unable to care for himself/herself;
• Your filing status is either single, married filing jointly, or head of household (the married filing separately tax status would not allow you to claim this tax credit);
• You and/or your spouse need to have earned income, or if your spouse is not working, he/she needs to be either a full time student, or be physically and/or mentally unable to care for himself/herself; and
• Of course pay for a babysitter, nanny, and/or a daycare center. If your kids attend a private school, and part of the tuition includes daycare and/or afterschool caring, then only the portion of tuition that pays for daycare and/or after school caring would be able to qualify for this tax credit.

There is one more thing that you need is that you need to get is the babysitter, nanny, and/or a daycare center’s full name, address, telephone number, and most important, the child care provider’s tax identification number, without it you are unable to claim this tax credit for the expenses for the caring of your kids. If you want more information on this tax credit, please let us know at [email protected]