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  5. Video: What is IRS Form 2441? Child and Dependent Care Expenses

Video: What is IRS Form 2441? Child and Dependent Care Expenses

Updated for Tax Year 2022 • November 17, 2022 02:14 PM


OVERVIEW

Do you hire a professional to care for your children? Or maybe to take care of your spouse or other family member who can't be left without supervision? Watch this video to learn more about how some of these expenses can save you money on your federal tax bill.


TABLE OF CONTENTS

For tax years beginning 2018, the 1040A and EZ forms are no longer available. They have been replaced with a new 1040 form. For those who are filing or amending prior year returns, you can continue to use form 1040A or EZ.


 

Video transcript:

Hello, I'm Tammy from TurboTax with some important information about the child and dependent care credit.

Do you hire a professional to care for your children? Or maybe to take care of your spouse or other family member who can't be left without supervision? Then you may want to hear more about how some of these expenses can save you money on your federal tax bill.

The child and dependent care credit allows you to reduce the income tax you owe based on some of the expenses you incur for paying someone to provide care to your child or other dependent. But in order to take the credit, you must prepare Form 2441 with your tax return and satisfy some eligibility requirements.

First, you must report earned income on your tax return, which is the compensation you receive for providing services, such as through employment. As you prepare Form 2441, you will notice that you must use the smaller of your earned income or care provider expenses to calculate the credit. So the more earned income you report on your tax return, the more likely it is that you'll be eligible to report the maximum amount of expenses allowable.

Taking the child and dependent care credit also requires that your reason for hiring a care provider is so that you can work at your job or search for a new one. However, if the care is for someone who doesn't have a physical or mental impairment, they must be your child and under the age of 13 when you incur the expenses.

Your adjusted gross income is also important in determining how much of a credit you can take. This is because the higher your adjusted gross income, the lower the credit you're eligible to claim.

If you receive tax-free or tax-deductible dependent care benefits from your work, you will need to reduce the amount of credit you claim by this amount. For example, if you receive $2,000 from your employer to subsidize your dependent and child care costs, the maximum amount of expenses that Form 2441 allows for must be reduced by $2,000 before calculating the credit.

To get the credit you need to file form 1040A or 1040. TurboTax will make sure that right forms are selected to maximize the Child and Dependent Care Credit on your tax return.

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