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/cheap-child-care-affordable-day-care-finding-advice.htm http://childcarefinders.org/cheap-child-care-affordable-day-care-finding-advice.htm#comments Mon, 20 Jul 2009 19:29:43 +0000 Dr. Smith http://childcarefinders.org/?p=213 With daycare costs rising every day, it is becoming increasingly difficult to find affordable care for your child. During this period of recession, parents are becoming increasingly concerned about ways in which they can cut corners yet provide quality care to their children. Child care can be very expensive but with a little planning and innovative thinking, you can save on costs. Here are some tips to find cheap child care in the USA.

Budget Child Care: Low Cost Child Care Options

Dropping a child off at the nearest good day care center seldom amounts to “cheap” child care and therefore parents need to explore their options for low cost child care. There are a number of ways in which you can provide cheap child care for your kids. You must research the availabilities in your area to reach a balance between affordability and quality of the care provided.

• Formal day care center :  These places will usually be listed and are fairly expensive. However, they are mostly trained well in providing care and help your child’s interactive skills.
• Not-for-profit daycare center :  These places also have a fairly well-trained staff but are slightly cheaper than formal day care centers as they receive considerable amounts of government aid.
• Daycare Homes :  These child care homes are much smaller than daycare centers and care is usually a family run business by experienced individuals. They are usually more affordable and are probably well suited for those looking for budget child care.
• Family care :  This kind of child care is an informal arrangement made with family members or friends. The quality of such care is usually lower as the individuals are inexperienced at formal child care. However, it is very affordable child care and makes one feel safer.
• In-home Care: As a low cost child care option, a part-time babysitter can be hired on an hourly basis to care for your child at home. This is more convenient and an affordable child care option for you.

Budget Child Care To Reduce Child Care Costs

Budget child care is becoming an increasing concern amongst parents as a good low cost child care option helps them to cut down on heavy child care expenses. By keeping these small factors in mind, you could find it more affordable to provide child care your kids:

• Family care : Keeping your children within the family members for child care such as with grandparents or relatives can be much cheaper and a good affordable child care option. It also gives you peace of mind and flexibility of timings.
• Student care : Hiring a student from a nearby college is a good source of cheap child care. These students work for much lesser than a local daycare center and fit a low cost child care budget.
• Arrange swaps : Cheap child care is required by all families. Coming up with arrangements to swap kids according to your schedules with neighbors would be more affordable for everyone.
• Save on taxes : The government allows numerous tax deductions for child care. You can take advantage of the Dependent Care Tax Credit or the Dependent Care Account to make your child care more affordable.
• Switch schedules : By switching around your schedules with your spouse you can co-ordinate to have someone stay at home with the children more often and stick to your child care budget as well.

Avoid Low Cost Child Care Dangers

While cheap and affordable child care is attractive to families on a tight budget, parents must not sacrifice the safety and wellbeing of their children for the sake of finding a cheap child care option. When choosing a low cost child care option, it is essential to ask some important child care questions and avoid some basic dangers:

• Avoid start-up budget day cares as they may be inexperienced.
• Research your cheap day care center well.
• Avoid young and irresponsible students as a cheap child care option.
• Lay down strict rules if you leave them with family or friends
• Inspect the place thoroughly before leaving your child in someone else’s care

Child care demands are increasing while the costs keep rising. It is therefore essential to keep all these tips in mind to make cheap child care more affordable for your family.Low cost child care options are not impossible to find but before you jump at the temptation of a cheap child care option, make sure you do your research well enough so you can leave your child in their care.

Working with children can be very rewarding, there is nothing like the satisfaction of watching a child improve in skills that you have helped them with. Quality care and play for children up to the age of 14 makes a huge impact on a child’s life and no other career can give you the satisfaction of knowing you played a part in that.

The satisfaction you gain however comes with a price and a career in childcare is not for everyone, a lot of patience is needed along with enthusiasm and the job can be demanding. If you can answer yes to most of the questions listed below then maybe childcare is the career for you:

Questions you should ask yourself

• I love being around young children.
• I have excellent communication skills.
• I am sensitive to the needs of parents.
• I am creative.
• I am willing to take training.
• I can be flexible.
• I am able to work with people from any background.
• I am patient.

What qualifications do I need?

Qualifications for working with children in teaching and play are needed at different levels and generally the higher level of qualification you have the higher the pay. As a very rough guide:

• Level 2 – This level allows you to work with children under supervision.
• Level 3 – This level gives you the freedom of working on your own with children and you are able to use your own initiative when planning and organising work or activities, this level also allows you to supervise others.
• Level 4 – This level is for managerial positions.

The qualification or level needed will depend on the position you apply for in childcare, an example would be half the carers who work in a day nursery must have qualifications in early years care level 3.

What choices are there for working in childcare?

There are several opportunities for working with children depending on the age of child you prefer working with, whether you want to work for just a few hours or full time. There are four basic choices which are Nursery and nursery assistants in schools, playgroups and pre schools, child minding and play work.

Nursery work

Nurseries provide full or half day care, play and education for children up to the age of 5 years, they can be run by local authorities, community groups or be privately owned. Some nurseries particularly those run by local authorities are attached to junior and infant schools and work close with them in easing the transition from nursery to infant schools. You would normally be helping in planning and providing activities, taking care of needs such as washing, taking to the toilet, feeding and providing nap time.

Pre-school and playgroups

Children attending pre-school or playgroup are normally between the age of 2 and 5, they provide you with working part time, full time or just in term time and you would usually assist in providing play and educational activities and help in the general care of the children such as washing, changing and nap times.

Child minding

This type of work will involve working with children of all ages and consists of either working in your own home with the children or working in the child’s home. One thing to bear in mind if you want to go into child minding is that you have to be registered.

In the UK as is the case in many other countries your home has to be inspected for suitability for providing childcare by the office for standards in education. Usually you will be able to take care of a maximum of two children per adult.

Play work

Play work usually involves out of school clubs, holiday schemes and breakfast clubs, children can range from the age of 4 to 14 years and this type of work is usually offered by local authorities, voluntary organisations, privately owned or community centers. Your role would be helping to run and organise various activities and the overall welfare and safety of the children attending.

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.