While kids get the summer off parents don't and daycare can be expensive and the IRS wants to remind parents that there is a tax credit available for child care expenses.
“When parents are working and they need someone to care for their child 13 or under they may be eligible for a tax credit for a percentage of the amount that they spend on health care,” says Mollie Reeves of the IRS office in Grand Junction.
The credit works like a coupon against what you owe the IRS. For example if you owe $1,000 and you have $300 of qualifying credit you would only owe 700.
The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income. 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. The credit is to be used for children 13 and under, but in some cases may also be used for a dependent that is over 13 and is not able to care for themselves.
Parents can use the credit not just for traditional daycare but also for things like summer day camps. Expenses for overnight camps however do not qualify.
To find out more on how to qualify for the credit, check out IRS publication 503, call 1-800-829-3676 or click the link below this story.
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