What Is The Child And Dependent Care Tax Credit?

The federal government recognizes the immense expenditure incurred by you while caring for your children. In order to provide you with some sort of relief it has designed the Child and Dependent Care Tax Credit program. If you have been paying for daycare expenses, this program lets you claim a child tax credit of up to $3000 for one child and up to $6000 for two or more children. This child tax credit is given for up to 35% of the expenses incurred in childcare depending on your income. Thus, even without having to reduce your daycare expenditure, the dependent care tax credit provides you with a considerable amount of financial relief and is found to be a particularly useful child care resource for single parents.

Qualifying For And Claiming Child Tax Credit

Like most tax benefits, claiming child tax credit also requires individuals to possess some basic qualification factors. The dependent care tax credit is given to hard-working individuals who spend money regularly on daycares, nurseries and even daytime summer camps for their children.

• If you have a child under the age of 13 or a dependent of any age who is unable to care for themselves then you may be eligible to qualify for the child and dependent care tax credit.
• In claiming child tax credit, you must however be paying more than 50% of your household costs for your dependent.
• Furthermore, you must hire someone other than your dependent to care for your child. Your childcare provider needs to provide you with their name, address and social security number which you can fill out in the form while claiming the tax credit.

While the child tax credit qualification rules of the IRS are fairly transparent, it is essential that you abide by them in order to lawfully claim your dependent care tax credit.

How To Claim Your Child Tax Benefit Credit?

Claiming child tax benefit credit is fairly simple and may be highly beneficial to you and your family. If you are unsure of how to go about claiming child tax credit, it is advisable to consult a qualified tax professional or accountant to help you file your claim for dependent care tax credit.

• While filing for your tax returns, simply fill out Form 1040, 1040A or 1040NR, whichever is applicable.
• Full details regarding this child and dependent care tax credit claim can be found on the IRS government website under Publication 503 (1). It describes in detail everything you would need to know regarding the child and dependent care tax credit claims.
• It must be kept in mind that this child tax benefit credit does not benefit lower income families too much as child tax credit is not refundable. If you do not pay taxes or your taxes are lower than your claim you will not be reimbursed for the dependent care tax credit. It is advantageous for families with income over $24000 a year.

The Child and Dependent Care Tax Credit is a very favorable program designed by the federal government to assist working individuals in caring for their children. It not only helps save money but also helps parents provide quality child care for their children by using the child tax benefit credit.

References
(1) Publication 503: Internal Revenue Service

]]> http://childcarefinders.org/save-by-claiming-child-and-dependent-care-tax-credit.htm/feed 0 http://childcarefinders.org/child-care-help-single-parents.htm http://childcarefinders.org/child-care-help-single-parents.htm#comments Thu, 07 May 2009 14:32:26 +0000 Dr. Smith http://childcarefinders.org/?p=21 Child Care & Single Parents

Caring for a child if you are a single parent isn’t an easy task but if you are caring for a child on your own then there are several ways you can get help and support, you may also be entitled to help with costs for child care if you are working or want to return to work. Benefits you may be entitled to claiming are:

• Child tax credit
• Working tax credit
• Child care allowance

Child tax credit

You can claim for this benefit if you have one child or more regardless of whether you are working or not, if you have a child under the age of one year old you will receive a higher payment or if you have a child who is disabled.

Working tax credit

You may be entitled to claiming working tax credit if you have a child and work at least 16 hours per week and this benefit is paid in addition to any child tax credit that you may be entitled to. The amount you are entitled to will vary depending on the hours you work or the amount of money you earn.

Child care allowance

If you work more than 16 hours per week and are entitled to receiving working tax credit then you are automatically entitled to help with child care costs, the amount you will be entitled to is up to a maximum of 70p for every £1 a week spent on child care costs.

There is an allowable spending limit for costs on child care per week; this is £175 per week if you have 1 child and £300 per week if you have 2 or more children. You could be entitled to claiming back up to 70% of these amounts.

Other ways you can get help and support

Being a single parent doesn’t only mean that you need financial support but also help with day to day living, bringing up a child alone can leave you drained with not much time or energy left for a social life. There are however ways that can help ease the stress and strain of single parenting, listed below are some tips:

• Take any help that is offered by your parents, other relatives or friends – see if anyone reliable and trustworthy would be willing to care for your child even if only for an hour so you can have a little time to yourself. Even if you don’t leave the house a long hot soak in the bath or just some time spent apart from your regular routine can make such a difference.
• Single parents support groups – These are generally held in community centers and are for single parents and their children, usually the meetings will have a crèche which will be run by volunteers and you can leave your child in the crèche which will be in the same building. Here you get a chance to meet other single parents and have coffee and a chat and just generally relax in the company of other adults.
• Church nursery groups – Often your local church group will have a crèche or nursery for young children below school age, these are usually run by volunteers from the church and they will take your child for a couple of hours for a minimal fee.
• Shopping center crèches – Most large shopping malls will have a crèche which is run by staff trained in child minding, most will have an age limit, although they can be expensive. Also, most will not take young babies, but this will allow you to shop for a couple of hours without the hassle of a child in tow.

If you are thinking of returning to work after having a baby then you are entitled to financial and practical help with childcare:

Parental leave

If you have a child who is under the age of 5 years or a disabled child under the age of 18 then you are entitled to take unpaid time off from work to take care of them. You are entitled to parental leave such as:

• Take 13 weeks off work for each child under the age of 5.
• 18 weeks off work for a child under the age of 18 who is disabled.

Parental leave is different from maternity or paternity leave and is usually unpaid. Parental leave must be taken in full weeks; you can’t for example take the odd day off to take your child to the Doctor’s. You can’t take more than four weeks leave in any one year and must give your employer at least 21 days notice when you want to take parental leave.

Early years education

All children aged 3 and 4 years are entitled to five, two and half daily sessions per week for three terms each year with a registered care provider, the care provider can be a school, nursery or play group

If you work for a large company then they may provide registered early years education within the workplace. You can also choose to use a child minder who is registered as a part of the child minding network.

Working families child tax credit

Child tax credit is a means tested benefit that you may be entitled to if you are a parent of a child in full time education, you may be entitled to receive this benefit if you work for more than 16 hours per week but are on a low income.

The tax credit includes a specific element if you are using registered child care for your child and can help with up to 80% of the cost of your child care. There are limits on the weekly cost of child care and as a rough guide if you pay child care costs for:

• One child – the maximum you could claim is £175 per week.
• Two or more children – the maximum you could claim is £300.

Child maintenance bonus

If you are receiving income support and are receiving child maintenance then you may be eligible for a benefit called the child maintenance bonus, the bonus builds up at £5 per week to a maximum of £1,000 and is paid as a one off lump sump when you find work or you work longer hours and are no longer entitled to income support.

Financial help for young parents

If you are a teenage parent then you may be entitled to financial help if you want to continue your education or training and need help with child care costs. A scheme called the “care to learn scheme” could give you up to £5,000 per year per child for parents up to the age of 20 and who are in education or training.

This benefit is provided to help you with childcare and traveling costs, you must use a registered child minder as your child’s carer and the money will be paid directly to the child care provider.