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The child and dependent care credit and summer care

On Behalf of | Jul 28, 2016 | Income Taxes

Many parents rely on summer day camps and day care for their children in Georgia each year. The care that is provided to their children may be eligible for a credit on their federal income tax returns called the “child and dependent care credit.”

Generally, care that is provided for children who are under the age of 13 will qualify for the credit. To be eligible, the parent must either be working or engaged in activities to seek and find work. Parents must have earned income to qualify. If they are married, their spouses must also have earned income, be full-time students or be unable to care for themselves.

In order to qualify for the credit, married couples who claim it must file joint income tax returns unless they are living separately. The credit is for between 20 and 35 percent of the allowed expenses. The expense limit is $3,000 per year for one qualifying child and $6,000 per year for two or more children who qualify. It is not possible to use the credit if care is provided by the spouse or a child who is under the age of 19. The cost of care paid to people who are dependents of the tax filer is also not eligible for the credit.

People who have questions about whether they might be able to apply the child and dependent care credit on their income taxes may want to consult with a tax law attorney. A lawyer might also advise his or her client regarding other credits and deductions for which the client may be eligible. A tax attorney may also be able to advise his or her clients about the types of documents the client will need to keep for record-keeping purposes. People may save substantial sums on their tax bills by taking all of the available credits for which they might be eligible.