Tax Tips Tuesday: Child Care Credit can Ease Summer Expenses

TeachingKids-FamilyBy The Tax Institute At H&R Block

For some kids, summer means sleeping in and doing whatever they want, while others have a schedule as structured as a school day. Depending on how kids spend their summers, their parents could be eligible to claim the Child and Dependent Care Credit.

Based on income, the credit can be claimed for up to 35 percent of qualifying expenses for in-home caregivers, day care facilities and some day camps. The maximum amount of qualifying expenses that may be considered for the credit is $3,000 for one child and $6,000 for two or more children.

For a parent to qualify for the credit the child must be 12 or younger and the caregiver cannot be the parent or stepparent, or someone the parent claims as a dependent. Generally, eligible parents are those who need a caregiver because they are working or looking for work, but some parents who are full-time students are eligible. Other qualifications apply when claiming the credit for care provided for adults.

Some parents may not need child care during the school year, but summer child care could bring the tax break into play.

Up to 1 in 6 Impacted by Expired Tax Benefits

Lynn Ebel, tax attorney at The Tax Institute, talks with the H&R Block newsroom about the impact expired tax benefits will have on taxpayers in 2015, including on teachers, students, homeowners and retirees.