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Child Care Credit or Reimbursement

If you have a child under the age of 13, or a dependent or spouse who is physically or mentally incapable of caring for him/herself, you are allowed a tax credit based on the expenses you incur for their care while you work or attend school. In general, you can claim the credit up to $2,400 worth of qualifying expenses for one child or dependent, and $4,800 if the care is for two or more. The minimum credit percentage is 20%, with the calculation made on Form 2441. The amount of qualifying expenses cannot exceed your income from your work.

If your employer provides day care, or a plan that reimburses you for day care expenses, you can exclude this from your income up to $5,000 per year. It is required that you meet the criteria above, and that you file Form 2441 with your return for that year, to elect the exclusion. Child care expenses for which you were reimbursed do not qualify for the credit explained above. And if your reimbursements exceed the $2,400/$4,800 maximums explained above, any additional costs you pay directly will not qualify for the credit.

In order to claim the tax credit or employer reimbursement exclusion, you must file Form 2441 with your tax return for that year. On it, you provide the name, address, Social Security number (Employer ID number, if a commercial business or child care center) of EACH child care provider, and the amounts paid to them.



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We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017