Summertime Child Care Expenses

Many parents who work or are looking for work must arrange for care of their children under 13 years of age during the school vacation.

Here are five facts the IRS wants you to know about a tax credit available for child care expenses. The Child and Dependent Care Credit is available for expenses incurred during the lazy hazy days of summer and throughout the rest of the year.

The cost of day camp can count as an expense towards the child and dependent care credit.
Expenses for overnight camps do not qualify.

If your childcare provider is a sitter at your home or a daycare facility outside the home, you'll get some tax benefit if you qualify for the credit.

The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income.

You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.

For more information, including rules for claiming this credit for your spouse or a dependent age 13 or over who is not able to care for himself or herself, check out IRS Publication 503, Child and Dependent Care Expenses. This publication is available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676).

IRS Publication 503, Child and Dependent Care Expenses (PDF)

Child and Dependent Care Credit - What You Should Know

If you paid someone to care for a child, spouse, or dependent, you may be able to reduce your tax by claiming the Child and Dependent Care Credit on your federal income tax return. Below are the top ten things you need to know about claiming a credit for child and dependent care expenses.

The care must have been provided for one or more qualifying persons. A qualifying person is your dependent child under age 13. Additionally, your spouse and certain other individuals who are physically or mentally incapable of self-care may also be qualifying persons. You must identify each qualifying person on your tax return.

The care must have been provided so you – and your spouse if you are married – could work or look for work.

You – and your spouse if you are married – must have earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment. One spouse may be considered as having earned income if they were a full-time student or they were physically or mentally unable to care for themselves.

The payments for care cannot be paid to your spouse, to someone you can claim as your dependent on your return, or to your child who is under age 19, even if he or she is not your dependent. You must identify the care provider on your tax return.

Your filing status must be single, married filing jointly, head of household or qualifying widow(er) with a dependent child.

The qualifying person must have lived with you for more than half of 2008.

The credit can be up to 35 percent of your qualifying expenses, depending upon your income.

For 2008, you may use up to $3,000 of the expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals.

The qualifying expenses must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from your income.

If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. If you are a household employer, you may have to withhold and pay social security and Medicare tax and pay federal unemployment tax. For information, see Publication 926, Household Employer's Tax Guide.


Publication 503, Child and Dependent Care Expenses (PDF 167K)
Form W-10, Dependent Care Provider’s Identification and Certification (PDF 31K)
Form 2441, Child and Dependent Care Expenses (PDF)
Form 2441 Instructions (PDF 32K)
Publication 17, Your Federal Income Tax (PDF 2,075K)
Tax Topic 602

Parents and Head of Household Status

If you moved out of your house on July 10, but was not divorced at the end of the year, you cannot file as head of household and take the earned income credit if I have a minor child. You will also not be eligible to claim the child care expenses.

And you ask why?

Well it's simple, you do not qualify for the head of household filing status because you and your spouse have not lived apart for the last 6 months of the taxable year and are not considered unmarried. Your filing status for the year will either be married filing separately, or married filing jointly.

If it is married filing separately, you will not qualify for the Earned Income Credit and cannot claim a credit based on child care expenses.

If you file a joint return with your spouse, you may be eligible to claim these credits. See Publication 503, Child and Dependent Care Expenses and Publication 596, Earned Income Credit.

Additional Resources:

Tax Topic 353, What is Your Filing Status?
Publication 501, Exemptions, Standard Deduction, and Filing Information
Publication 503, Child and Dependent Care Expenses
Publication 596, Earned Income Credit