Many parents who worked or were looking for work this summer had to arrange for care of their children under 13 years old during the school vacation. The Child and Dependent Care Credit is available for expenses incurred over summer break and throughout the rest of the year. Here are five facts you should know about this tax credit:
The cost of day camp can count as an expense towards the credit.
- Expenses for overnight camps do not qualify.
- If your childcare provider is a sitter at your home or a daycare facility outside the home, you’ll get some tax benefit if you qualify.
- 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 ($6,000 for two or more) to figure the credit.
For information, including credit for your spouse or dependents over 13 that cannot take care of themselves, contact our office at 412-816-2228.
{ 3 comments… read them below or add one }
Hi Jim!
Many of my clients ask for – and I give them the tax I.D. number for Rent A Mom… does this in anyway affect the business?
I look forward to your reply.
Suzanne
It makes total sense – if your clients are running their business the way they should, then ensuring that they have your correct Tax ID is perfectly appropriate. They are using it to keep track of the amount of money they are spending on your services so that they can deduct the expense at tax-time and produce an accurate corresponding 1099. They will then use the 1099 to report to you and the IRS what they have spent on your services.
In fact, the simplest and easiest form that the IRS has the W-8. This is what you should use (and what they should request) to give clients your tax ID.
Thanks for the reply… As usual – another question… What if its a client who hasnt used the service for temporary help except for a couple of times – lets say less than $50 was paid to Rent A Mom.
could this hurt Rent A Mom in any way regarding taxes because clients (former or current) claim X amount of dollars and give Rent A Moms tax ID number.