Purpose of Form
If you paid someone to care for your child or other qualifying person so you (and your spouse if filing jointly) could work or look for work during the tax year, you may be able to take the credit for child and dependent care expenses. You (and your spouse if filing jointly) must have earned income to take the credit.
If you (or your spouse if filing jointly) received any dependent care benefits for the year, you must use Form 2441 to figure the amount, if any, of the benefits you can exclude from your income. You must complete Part III of Form 2441 before you can figure the credit, if any, in Part II.
Dependent Care Benefits
Dependent Care benefits include:
- Amounts your employer paid directly to either you or your care provider for the care of your qualifying person(s) while you worked,
- The fair market value of care in a daycare facility provided or sponsored by your employer, and
- Pre-tax contributions you made under a dependent care flexible spending arrangement (FSA).
Your salary may have been reduced to pay for these benefits. If you received dependent care benefits as an employee, they should be shown in box 10 of your Form(s) W-2. Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O.
A qualifying person is:
- A qualifying child under age 13 whom you can claim as a dependent. If the child turned 13 during the year, the child is a qualifying person for the part of the year he or she was under age 13.
- Your disabled spouse who wasn't physically or mentally able to care for himself/herself.
- Any disabled person who wasn't physically or mentally able to care for himself/herself whom you can claim as a dependent or could claim as a dependent except:
- The disabled person had gross income of $4,050 or more,
- The disabled person filed a joint return, or
- You (or your spouse if filing jointly) could be claimed as a dependent on another taxpayer's return.
To be a qualifying person, the person must have lived with you for more than half of the tax year.
Special rule for children of divorced or separated parents. Even if you can't claim your child as a dependent, he/she is treated as your qualifying person if:
- The child was under age 13 or wasn't physically or mentally able to care for himself/herself, and
- You were the child's custodial parent. The custodial parent is the parent with whom the child lived for the greater number of nights during the tax year. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher AGI.
The noncustodial parent can't treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents.
These include amounts paid for household services and care of the qualifying person while you worked or look for work. Child support payments aren't qualified expenses. Also, expenses reimbursed by a state social service agency aren't qualified expenses unless you included the reimbursement in your income.
Generally, if you worked or actively look for work during only part of the period in which you incurred the expenses, you must figure your expenses for each day. However, there are special rules for temporary absences or part-time work. See Pub. 503 for more details.
These are services needed to care for the qualifying person as well as to run the home. They include, for example, the services of a cook, maid, babysitter, housekeeper, or cleaning person if the services were partly for the care of the qualifying person. Don't include services of a chauffeur or gardener.
You can also include your share of the employment taxes paid on wages for qualifying child and dependent care services.
Care of the Qualifying Person
Care includes the cost of services for the qualifying person's well being and protection. It doesn't include the cost of food, lodging, education, clothing, or entertainment.
You can include the cost of care provided outside your home for your dependent under age 13 or any other qualifying person who regularly spends at least 8 hours a day in your home. If they care was provided by a dependent care center, the center must meet all applicable state and local regulations. A dependent care center is a place that provides care for more than 6 persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center isn't run for profit.
You can include amounts paid for items other than the care of your child (such as food and schooling) only if the items are incidental to the care of the child and can't be separated from the total cost. But don't include the cost of schooling for a child in kindergarten or above. You can include the cost of a day camp, even if it specializes in a particular activity, such as computers or soccer. But don't include any expenses for sending your child to an overnight camp, summer school, or a tutoring program.
Some disabled spouse and dependent care expenses can qualify as medical expenses if you itemize deductions on Schedule A. However, you can't claim the same expense as both a dependent care expense and a medical expense.
Due Diligence Tip: You can show a serious and earnest effort to get the information by keeping in your records a Form W-10 completed by the care provider (provided by the taxpayer). Or you may keep one of the other sources of information listed in the instructions for Form W-10. If the provider doesn't give the information, complete the entries you can on line 1. For example, enter the provider's name and address. Enter "See Attached Statement" in the columns for which you don't have the information. Then, attach a statement explaining that the provider didn't give the taxpayer the information you requested.
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