Frequently Asked Tax Questions
Child Care Credit, Other Credits - Child and Dependent Care Credit & Flexible Benefit
Plans
Rev. date: 12/21/2012
The expense of tuition for kindergarten does not qualify for the child and dependent care credit because kindergarten is primarily educational in
nature.
- The expense of your child's care at school may qualify for the credit, if it can be separated from the expense of your child's
education.
- For example, the expense of an afterschool care program may qualify, even though the expense of school tuition does not
qualify.
Rev. date: 12/21/2012
This type of plan is an agreement to voluntarily reduce your salary in return for an employer-provided fringe
benefit.
- These plans give you a choice of whether to receive cash wages or a benefit for dependent
care.
- You are receiving a tax benefit because you are not paying taxes on the money that is set aside to pay for the dependent
care.
Whenever you participate in a dependent care benefits program through your employer, you must complete and attach
Form 2441 (PDF),
Child and Dependent Care Expenses, to your tax return.
Rev. date: 03/12/2013
Yes, if you meet the other requirements to claim the child and dependent care credit, but are missing the social security number or other taxpayer identifying number of a provider, you can still claim the credit by demonstrating "due diligence" in attempting to secure this
information.
- If a provider of childcare refuses to give a taxpayer the identifying information, the taxpayer can still claim the
credit.
- The taxpayer must provide whatever information is available about the provider (such as name and address) on
Form 2441 (PDF),
Child and Dependent Care Expenses.
- The taxpayer should write "See Attached Statement" in the columns requesting the missing
information.
- The attached statement should explain that the taxpayer requested the provider’s identifying number, but the provider did not give it to the
taxpayer.
- This statement will support a claim of the use of due diligence in trying to secure the identifying
information.
Rev. date: 03/12/2013
These payments may be qualified childcare expenses if the family member babysitting is not your spouse, the parent of the child, your dependent, or your child under age 19, and if you otherwise qualify to claim the child and dependent care
credit.
Who is responsible for taxes on these payments depends on whether your family
member is your employee or is self-employed (an independent contractor).
- See
Publication 15-A (PDF),
Employer's Supplemental Tax Guide,
for a general discussion of how to determine whether an individual who is
performing services for you is an employee or an independent contractor.
- Special rules apply to family employees generally, and to family employees who perform household work (including babysitting) in your home. See
Publication 15,
(Circular E),
Employer's Tax Guide, and
Publication 926,
Household Employer's Tax Guide, for more information on these rules.
- If your family member is your employee, and no exceptions apply, then you are generally responsible for withholding and paying
taxes.
- If your family member is not your employee, then the family member will be responsible for paying income taxes and any applicable self-employment taxes on the income
earned.
Rev. date: 12/21/2012
Daycare payments for an elderly person may qualify as dependent care expenses if the person receiving the care is your spouse or qualifying person who lives with you and is incapable of
self-care.
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