Can I Claim Daycare on My Taxes?
- You may claim daycare expenses for dependent children under age 13 or for older children and adults who are physically or mentally unable to care for themselves. If a child turns 13, no longer lives with you full-time or otherwise ceases to qualify as a dependent during the year, you may claim expenses up until the time the child became non-qualified. In cases of divorce, only custodial parents may claim the CDCTC.
- You and your spouse (if applicable) must have earned income in the year you claim the credit. Earned income includes wages, salaries, tips and self-employment income. If you are married, one of you may be a full-time student. You may also claim the credit if your spouse is physically or mentally unable to care for himself. The daycare must be provided so that you can work or look for work -- if you work part-time but daycare is full-time, you can only claim the portion of expenses incurred while you were working.
- Care must be provided to a qualifying person and can be inside or outside your home. School expenses for kindergarten and older children are not considered qualifying expenses; however, before- and after-school programs can qualify. Preschool programs are qualified, as are summer day camps. Care cannot be provided by your children under age 19, other dependents, your spouse or the child's parent. If you employee household workers who care for a qualifying person as part of their regular duties, the portion of their salaries devoted to care may be a qualifying expense.
- You must use IRS Form 1040, 1040A or 1040NR to file your taxes, and you will calculate your credit using Form 2441. You need to provide the Social Security number or Tax Identification number for all qualified dependents. You must also provide identifying information for your care provider -- the Tax Identification number, if possible, along with a name and address. Your total credit may be reduced if your income is above certain limits; see IRS Publication 503 for complete details.