Child and Dependent Care Questions

Michael Lodge

by Michael Lodge

I thought it would be wise to answer the question so many clients ask on child and dependent care credits.  So many of our clients with children get confused as to what can be deducted or claimed.  So let’s go over these concerns.

Question: My spouse and I both work and are eligible for the child and dependent care credit. Can I include the expense of my 5 year-old son’s private kindergarten tuition as a qualified expense on Form 2441, Child and Dependent Care Expenses?

Answer:

No, the expense of tuition for kindergarten does not qualify for the child and dependent care credit because a tuition paid to an educational institution (in kindergarten or a higher grade) is not a payment for the child’s care.

However, the expense for a before- or after-school care program may qualify, even though the expense of school tuition does not qualify.

Question: My babysitter refused to provide me with her social security number. Can I still claim the amount I paid her for childcare while I worked? If so, how do I claim these childcare expenses on my tax return?

Answer:

Yes, if you meet the other requirements to claim the child and dependent care credit but are missing the social security number or other taxpayer identifying number of your provider, you can still claim the credit by demonstrating due diligence in attempting to secure this information.

  • Provide whatever information you have available for your provider (such as name and address) on Form 2441, Child and Dependent Care Expenses.
  • Write “See Attached Statement” in the columns requesting the missing information. Explain on the attached statement that you requested the provider’s identifying number, but the provider did not give it to you. This statement supports a claim of the use of due diligence in trying to secure the identifying information.

Question: Can I claim both the child tax credit and the child and dependent care credit?

Answer:

You can claim both the child tax credit and the child and dependent care credit on the same return if you qualify for both credits.

  • If you qualify for one or both credits, you can claim the credits on Form 1040, Form 1040A, U.S. Individual Income Tax Return, orForm 1040NR, U.S. Nonresident Alien Income Tax Return. In addition, to claim the dependent care credit, you must completeForm 2441, Child and Dependent Care Expenses.
  • The Instructions for Form 1040 and the Instructions for Form 1040A explain who qualifies for the child tax credit, taxpayer identification number requirements, and how to calculate the credit.
  • If you are claiming the child tax credit for a dependent child who has an ITIN, complete Part I of Schedule 8812 (Form 1040A or 1040), Child Tax Credit, and attach it to your Form 1040, 1040A, or 1040NR.
  • If you are claiming the additional child tax credit, complete Parts II – IV of Schedule 8812 (Form 1040A or 1040).
  • The Instructions for Form 2441 explain who qualifies for the dependent care credit and how to calculate it.

If you have any questions please submit them to:  tax@icontaxgroup.com