Can I Deduct Day Care Expenses From My Taxes?
The Internal Revenue Code does not provide taxpayers with a deduction for day care expenditures. However, a tax credit is available for a portion of the amounts paid during the tax year for day care services of a child or other dependent.
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Qualifying Person
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To qualify for the tax credit, the expenditures must be spent for day care services of a dependent child under the age of 13, a spouse that is either mentally or physically unable to care for himself and for other individuals that reside with you who are physically or mentally unable to care for themselves. Payments for day care services cannot be made to an individual eligible to be your dependent, a spouse, a parent of the qualifying person or to any of your children under the age of 19.
Earned Income
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To receive the tax credit, you must have earned income during the tax year. Earned income includes wages and earnings from self-employment but excludes interest, dividend, social security and pension income.
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Work-Related
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The Internal Revenue Service requires that day care services be obtained to allow the taxpayer to work or search for work. For the purposes of the tax credit, full-time students are considered as working.
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