Hello, I'm Tiffany Smith from TurboTax with important news for parents.
Did you pay for child care so you could work or look for work? If so, you may qualify for $3,000 in tax credits for one dependent, and a maximum of $6,000 for two dependents or more.
Who qualifies as your dependent? Any child up to age 12 who lived with you for more than six months of the tax year. There are special considerations for married, divorced and separated individuals.
The tax credit repays a percentage of your child-care costs, starting at 35%. The more money you make, the lower percentage, sliding down to 20% for incomes over $43,000. For example, at $40,000 of income, the credit is 22%. So if your child-care bill was $3,000, your credit is worth $660.
Besides costs devoted exclusively to child care, expenses that cover household services, such as housekeeping, while you work or search for work, also count toward the credit if the services were necessary in part for child care. If you were not employed full time, claim only the child-care expenses for the part of the day you worked or looked for work. And don't deduct payments to a spouse or anyone you claim as a dependent.
Remember, TurboTax can help you get every credit you qualify for. For more information about this and other tax topics, visit TurboTax.com.