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Volume 26; Child and Dependent Care Tax Credit

Posted by Admin Posted on Aug 30 2016



Written by: Madeline Brinker, Staff Accountant

Many parents enroll their children in day camps or pay for daycare while school is out for the summer. If you are a working parent, be sure that you are not missing out on the Child and Dependent Care Credit that may be available to you.

A Federal tax credit is available to families who enroll their children under age 13 in day camps or other childcare programs during the summer and throughout the year. In order for the childcare expenses to qualify, there is a set of criteria that must be met:

  • You and your spouse if you are married, must work or be looking for work. (The exception to this rule is met if you are a full-time student)
  • If you are married, you must file your return jointly to qualify for the credit. 
  • Overnight camps, summer school tutoring, and care provided by your child under age 19 or someone else you claim as a dependent on your tax return do not qualify as dependent care expenses for purposes of the credit.

Childcare expenses used to calculate the credit are limited to $3,000 for one qualifying child or $6,000 for two or more qualifying children. The credit you receive is calculated as 20-35% of the allowable expenses. Where you fall in the 20-35% range is determined by your income level. If you receive dependent care benefits through your employer, the amount of expenses eligible for the credit are reduced by the benefits received.

If you believe that you qualify for the Child and Dependent Care Credit, be sure to keep all of your records and receipts so that you have them available when you file your 2016 tax return next year. If you have any further questions about this topic or any other tax planning questions, feel free to reach out to one of our tax professionals at any time.  


Here is a recap of important tax due dates to keep in mind for the remainder of the year:  

  • September 15, 2016 - 2016 3rd quarter estimate payment due
  • September 15, 2016 - 2015 Forms 1120, 1120-S, 1041, and 1065 due date, if extended
  • October 17, 2016 - 2015 Form 1040 due date, if extended
  • January 16, 2017 - 2016 4th quarter estimate payment due              

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Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

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