I remember the days when our young ones were in childcare. We would allot the maximum amount allowed under my wife’s flexcare (or cafeteria) plan in order to deduct as much of childcare on our tax return.
However, there are also tax credits you may be able to declare. Always check with your tax advisor before making any decisions, but here is a list of requirements to get you started:
1. Children must be under age 13 in order to qualify.
2. Taxpayers may qualify for the credit, whether the childcare provider
is a sitter at home or a daycare facility outside the home.
3. You may use up to $3,000 of the unreimbursed expenses paid in a year
for one qualifying individual or $6,000 for two or more qualifying individuals
to figure the credit.
4. The credit can be up to 35 percent of qualifying expenses, depending
on income.
5. Expenses for overnight camps or summer school/tutoring do not
qualify.
6. Save receipts and paperwork as a reminder
when filing your tax return. Remember to note the Employee Identification
Number (EIN) of the camp as well as its location and the dates attended.
This list should be considered anytime of the year, not in April for the previous year. Proper tax planning with a CPA can save money. Discuss this with a professional before taking any action.
Source: IRS Publication 503
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