Child and Dependent Care Credit

What this actually is

If you paid someone to care for a child under 13, or for a spouse or dependent who cannot care for themselves, SO THAT you could work or look for work, part of what you paid comes back as a tax credit. It is calculated as a percentage of your care expenses, and the percentage depends on your income. This is not a payment toward childcare going forward — it is money back after the fact, on your return. The commonest misunderstanding is that any childcare counts: it does not. The care has to have been what allowed you to work or job-hunt, and food, lodging, clothing, schooling and entertainment are excluded from the expenses.

Who qualifies, and what trips people up

You (and your spouse if filing jointly) must have earned income. The qualifying person is generally a dependent under 13, or a spouse or dependent of any age incapable of self-care who lived with you more than half the year. The hard requirement that stops most claims: you must name the care provider on Form 2441 with their address and taxpayer ID number. An under-the-table sitter who will not give you a number means no credit.