Child and dependent care expenses are deductible if the qualifying person is under the age of 13 or is disabled and can be claimed as a dependent of the taxpayer.
The expenses must be to allow the taxpayer to work or look for work. Therefore, the taxpayer must have earned income.
A spouse who is a student is deemed to be gainfully employed during each month that he/she is a full-time student at an educational institution. That does not include on-the-job training, correspondence schools and night schools.
Most people associate this deduction with children. However, if a taxpayer’s spouse is disabled and unable to care for him/herself, the taxpayer may take this deduction for expenses incurred to care for the spouse while the taxpayer is at work.
This deduction is also available for a dependent who is disabled and over the age of 13, if the expenses were incurred while the taxpayer was at work.
Child care expenses can be associated with before- and after-school care, day camps and similar programs, as well as pre-school expenses.
The Internal Revenue Service has determined that children who are in kindergarten do not qualify for the deduction because it is an educational cost. This is true even if the cost is for a private school that has a full day of kindergarten.
Day camps must not be overnight camps to qualify as deductible.
Household services, including cooks, maids, baby sitters or cleaners, qualify as deductible if the services were partly for the care of a qualifying person.
In order to take the deduction, the qualifying person must have lived with the taxpayer for more than half the year.
The expenses are work-related in that the expenses must be for care provided in order for the taxpayer and spouse to work or actively look for work. No credit is allowed if the taxpayer actively looks for work and does not find a job and has no earned income for the year.
To take the credit, the taxpayer must have the provider’s name, address, taxpayer identification number and amount paid for the care of the qualifying person.
For more information regarding child and dependent care, visit www.irs.gov and type “Dependent Care” or Publication 503 in the search box.
Tracy Bunner is an enrolled agent and tax preparer with an office in Harrisville. She can be reached at 801-627-2212 or tracystaxservice@yahoo.com.
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