(An excerpt from IRS.gov)
A reminder from the household payroll & nanny tax experts at GTM Payroll Services and the IRS, regarding summertime child care.
Did you know that your summer day care expenses may qualify for an income tax credit?
Many parents who work or are looking for work must arrange for the care of children under 13 years of age during the school vacation. Did you know that those child care expenses may help you get a credit on next year’s tax return?
If you’re a parent currently notutilizing the DCAP options available to you, here are five facts the IRS wants you to know about a tax credit available for your child care expenses. The Child & Dependent Care Credit is available for expenses incurred during the lazy hazy days of summer and throughout the rest of the year.
1. The cost of day camp may count as an expense towards the child and dependent care credit.
2. Expenses for overnight camps do not qualify.
3. If your childcare provider is a sitter/ nanny at your home or a daycare facility outside the home, you'll get some tax benefit if you qualify for the credit.
4. The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income.
5. You may use up to $3,000 of the un-reimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.
For more information check out IRS Publication 503, Child and Dependent Care Expenses. This publication is available from the IRS or on GTM.com under Tax Resource Center.
For specific questions, contact GTM’s Household Tax & Payroll Specialists toll-free at (888) 432-7972 or simply click hereto discover your potential Tax Savings using our FREE online tax calculator! The most accurate tool currently available, including annualized payroll and tax information, GTM’s FREE online tax calculator aids in estimations for Tax Savings which household employers could potentially benefit from, including DCAP and Child & Dependent Care Tax Credit calculations.
Since many qualifications and limitations apply to the various credits, additional information is available at www.IRS.gov. Also, please see the following post: 5 Tax Topics for Taxpayers with Tots & Teens.
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The items included in this blog are informational only and are not meant to exclude the tax advice from an accredited representative. Please consult the experts at GTM or another professional tax adviser for more information and to determine how any item applies to your personal tax scenario.
