How to Claim Daycare Expenses on Tax Returns
Having children in daycare can be one of the biggest expenses for your family. The government allows one to claim many of these dependent care expenses as a credit towards our income taxes. There is up to 3,000 dollars credit available for one child. These costs can come from day care, day camps, and even baby sitters. It can even include an adult who is physically or mentally unable to take care of themselves. Claiming the expenses of this care on your tax return can be very valuable.
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Instructions
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Use a registered or licensed daycare provider. If you do not use a licensed provider, you will have no way of claiming the expenses, because they will not be registered with the state.
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Save the receipts given to you by your daycare provider so that you keep track of the exact amount you are spending annually.
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Compare your records to the records that your daycare provides at the end of the year. If there is discrepancy, work with your provider to reconcile the difference.
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Ask your provider for its tax ID number. If you use a home provider who does not have a tax ID number, use her Social Security number.
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If you cannot get the tax ID or Social Security number, call the licensing agency and request it. If your provider is not licensed, again, there will be no a way to obtain the information needed to claim the costs on your taxes.
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Fill out your tax form. When you get to the Dependent Care Expenses, enter your total daycare cost amount for the year. Publication 503 from the IRS contains paperwork needed to fill out dependent care expenses. This publication also includes a 2441, the dependent-care worksheet for people filing a 1040.
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Tips & Warnings
When first starting your child at a new daycare, ask if it is licensed, how often you will receive a record of what you have paid and what the tax ID or Social Security number is. This way you can avoid searching for the information as you are filing your taxes.
