Having kids is expensive. Very expensive. The food, the clothes, the diapers and the toys are just the beginning. For most families, child care is the highest single household expense, as mentioned in this recent Yahoo Finance article.
But, there’s good news! Uncle Sam is here to help and can offset some of your daycare costs. However, in order to get it, you need to be aware of some important facts. Here are 10 things you need to know to claim your child care tax credit (aka Child and Dependent Care Credit):
1. You must identify each qualifying child on your tax return.
The qualifying child must be your dependent and qualifying children must have been 12 or younger when the care was provided. The logic is that most children over 12 are able to look after themselves. However, if your child is over 12 but incapable of self-care then they may also qualify.