with author Danisha Danielle
childcare tax credit
I love finding nice little tidbits of useful information on Twitter. As I was reviewing some different camps for my daughter to participate in when she returns from sleep away camp, I stumbled upon a tax credit available for summer childcare from Tiff, The Tax Lady (@tiffthetaxlady).
Tiff outlines the basic guidelines for the “Child and Dependent Care Tax Credit” on her website:
1. Children must be under age 13 to qualify for the credit.
2. Taxpayers may qualify for the credit, whether the childcare provider is a sitter at home or a daycare facility outside the home.
3. You may use up to $3,000 of the non-reimbursed expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals to figure the credit.
4. The credit can be up to 35 percent of qualifying expenses, depending on income.
5. Expenses for overnight camps or summer school/tutoring do not qualify.
Here are a couple of steps to avoid at least one headache when tax time rolls around months from now
• Obtain the EIN number from your childcare providers in writing when you submit payment.
• Keep your receipts and/or and daycare EIN number in a special place.
Click here for more information: 2011 IRS Publication 503, Child and Dependent Care Expenses. This publication is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).