You may face big trouble to manage both house, kids and your profession during your kid’s summer vacation in this year. You may want to send your children to the summer day camp but the high cost is a big hindrance. It is true, that summer babysitting expense is a big matter for many working parents. But most of working parents are totally unaware that they can get tax break to cover all the babysitting expenses to provide day care of their loving kids, spouse or other dependents.
Working parents can apply the expenses to child and dependent care tax credit. It can help them to save on their tax bill at filing time. But there are some notable IRS eligibility guidelines they need to meet.
Following are some care services which are noticeably eligible for the credit.
You can claim for the credit to provide care to your child. Your child should meet some criteria first. You need to consult your tax adviser if you’re a divorced parent or single parent to know the tax filing instructions properly.
You can claim for the credit or tax break to take care of other dependents . The other dependents should meet the IRS criteria such as:
You should pay the employment taxes if you keep a caregiver at home to provide care.
Child and Dependent Care Tax Credit is very useful to cover the cost when you want to care for your child, spouse, other dependent . There are some IRS guidelines/facts you need to know when you're claiming for Child and Dependent Care Tax Credit to meet the care costs.
Fact 1 - Attach the form 2441 when you’re claiming for credit. Software will do this on behalf of you if you use IRS e-file.
Fact 2 - Do not forget to mention the social security number for all the eligible individuals.
Fact 3 - When your employer provides you the dependent care benefits, you need to go through the form 2441 to know the rules in details.
Fact 4- If you keep someone to take care of your dependent, spouse, child in last year, you are eligible for the child and dependent care credit. In that case, you should file your federal income tax return.
Fact 5 - Follow “qualifying individual” when you are claiming for Child and Dependent Care Credit. “Qualifying individual” requires your dependant or spouse to live with you for more than half the year in case of disability. The age of your child should be under 13.
Fact 6 - Payments for care cannot go to your spouse, child who is under age 19.
You can get information in detail at IRS.gov. The federal government encourages all the parents to take advantage of Child and Dependent Care Tax Credit to cover the expenses of raising a child and manage a disabled spouse or dependent efficiently.