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IRS.gov Website
Rev. date: 01/01/20011


Child and Dependent Care Credit

Tax Topic 602
rule
If you paid for the care of a qualifying individual so that you (and your spouse if you are married) could work or look for work, you may be able to claim the child and dependent care credit. If you are married, both you and your spouse must have earned income, unless one spouse either was a full-time student for 5 months of the tax year or was physically or mentally incapable of self-care. An individual is physically or mentally incapable of self-care if, as a result of a physical or mental defect, the individual is incapable of caring for his or her hygiene or nutritional needs, or requires the full-time attention of another person for the individual's own safety or the safety of others.
The credit is generally a percentage of the amount of work-related child and dependent care expenses you paid to a care provider. The percentage depends on your adjusted gross income.
Work-related child and dependent care expenses qualifying for the credit are those paid for the care of a qualifying individual to enable you to work or actively look for work for any period when you had one or more qualifying individuals. Expenses are paid for the care of a qualifying individual if the primary function is to assure the individual's well being and protection. In general. amounts paid for services outside your household qualify for the credit if the care was provided for a qualifying individual who (i) was your qualifying child under age 13 or (ii) regularly spent at least 8 hours each day in your household.
The expenses qualifying for the credit must be reduced by the amount of any dependent care benefits provided by your employer that you excluded from gross income. The total expenses qualifying for the credit are capped at $3,000 (if you had one qualifying individual) or at $6,000 (if you had two or more qualifying individuals), and may not exceed the lesser of your and your spouses earned incomes. Refer to Publication 503, Child and Dependent Care Expenses, for additional information.
For purposes of the child and dependent care credit, a qualifying individual is:
  1. Your dependent who was under age 13 when the care was provided and was your qualifying child;
  2. Your dependent who was physically or mentally incapable of self-care and who had the same principal place of abode as you for more than half of the year, or
  3. An individual who was physically or mentally incapable of self-care, had the same principal place of abode as you for more than half of the year, and was your dependent. For this purpose, whether the individual was your dependent is determined without regard to the individual's gross income, whether the individual filed a joint return with the individual's spouse, or whether you or your spouse could be claimed as a dependent on someone else's return.
For more information on who is a dependent or qualifying child, refer to Publication 501, Exemptions, Standard Deduction, and Filing Information.
A noncustodial parent may not treat a child as a qualifying individual for purposes of the credit, even if the noncustodial parent may claim an exemption for the child. For divorced or separated parents or parents who live apart at all times during the last six months of the year, refer to the topic Child of Divorced or Separated Parents or Parents Living Apart in Publication 503, Child and Dependent Care Expenses.
If a person was a qualifying individual for only a part of the tax year, only those expenses paid during that part are included in calculating the credit.
In addition to the conditions just described, to claim the credit, you must meet all the following conditions:
  1. The care provider to whom you made payments for the care of qualifying individuals must not be someone you (or your spouse if you are married) can claim as your dependent, or your child who is under the age of 19. In addition, your payment must be made to a provider who is not your spouse or the parent of your child who is your qualifying individual.
  2. You must file a joint return if you are married.
  3. You must provide the taxpayer identification number (usually the social security number) of each qualifying individual on the return on which you claim the credit.
  4. You must report the name, address, and taxpayer identification number (either the social security number, or the employer identification number) of the care provider on your return. If the care provider is a tax-exempt organization, you need only report the name and address on your return. You can use Form W-10, Dependent Care Provider's Identification and Certification, to request this information from the care provider. If you do not provide information regarding the care provider, you may still be eligible for the credit if you can show that you exercised due diligence in attempting to provide the required information.
If you qualify for the credit, complete Form 2441 with Form 1040 or Form 1040-A. If you received dependent care benefits from your employer (this amount should be shown on your Form W-2), you must complete Part III of Form 2441. You cannot use Form 1040-EZ if you claim the child and dependent care credit.
If you pay someone to look after your dependent or spouse in your home, you may be a household employer. If you are a household employer, you may have to withhold and pay social security and Medicare taxes and pay federal unemployment tax. For more information, refer to Publication 926, Household Employer's Tax Guide, or Tax Topic 756.