Child care expenses are a significant financial burden, sometimes making it difficult or impossible for parents to work. Fortunately, the Child Care Credit offers some relief for families struggling with the cost of daycare or other critical expenses. Below are the answers to some common questions about this important credit, courtesy of the tax return preparation professionals at Gillette & Associates LLC CPA in La Crosse, WI.

Answers to Questions About the Child Care Credit

Who Qualifies for It?

The Child Care Credit is only available to parents who have earned income and spend money caring for a qualifying individual under the age of 13. If you are married, both you and your spouse must either actively work or attend school full time, and you must file a joint tax return.

What Expenses Qualify for the Credit?

A wide range of expenses may qualify for the Child Care Credit, as long as they’re used primarily for the child’s benefit. This may include the costs of daycare, summer camp, or an in-home babysitter. However, tax return preparation professionals note the costs of kindergarten and other educational expenses are exempt.

How Much Can I Receive?

The maximum credit is $3,000 for one child or $6,000 for two or more. However, how much you can claim depends on the number of children you have, your income level, and how much you spent on their care. Your tax return preparation professional will determine how much you qualify for.

Is There a Maximum Income?

The Child Care Tax Credit is available to all parents, regardless of income. However, those with higher salaries will receive credit for a smaller percentage of their expenses, while lower-income families may be able to count up to 35%.

For over 20 years, Gillette & Associates LLC CPA has been providing first-class tax return preparation services to families throughout La Crosse. No matter how simple or complex your finances may be, you can rely on their team to ensure you get every deduction and credit you qualify for. Visit them online to learn more, or call (608) 784-8355 now to schedule your first appointment with an accountant.