Child Care Tax Credit

If you're a single parent or you and your spouse must both work to make ends meet for your young family, you may be eligible for the child care tax credit. Child care isn't cheap, especially for those who are working to make ends meet as it is. If you're a parent of one child, the maximum tax credit that can be redeemed is $3,000. For any more than one child, the maximum tax credit that can be claimed and redeemed is $6,000. The child this care is provided for cannot be over 13. If the child has special needs and is over 13 but requires care, then you will claim the dependent care tax credit instead of child care. One last eligibility requirement is that the child care provider cannot be related to the person claiming the tax credit. The form this tax credit will be claimed on is either Form 2441 or Schedule 2.

The amount your tax credit will be in relation to the expenses one pays for child care will actually only be between 20 and 35 percent of the care's total cost. The cost is calculated by choosing the smallest of three numbers: your earned income, child care expenses and maximum credit allowance. Whichever is the smallest is the one that the credit is drawn from.

To claim the credit, you will need to know: the child care provider's name, address, identification number (SSN or EIN) and the overall amount paid for the child care services during the last tax year. You will also need to provide the name and social security number of the child to which this tax credit applies.