As long as you work – and pay the nanny/manny/babysitter on the books – families with two kids can claim up to $6,000 in tax credits this year. So how does it work?
- Your kids have to be under age thirteen. You may be worried about leaving the fourteen-year-old alone in a house with a well-stocked liquor cabinet, but the IRS doesn’t care.
- You must be making an income. Ya know, that’s why they call it a credit on your INCOME taxes.
- If your employer gives you money toward childcare, that must be deducted from the amount you’re claiming. If your employer is that type, please give me his number. I want to work there.
- You can’t write off what you pay to one of your other kids to watch their siblings (sigh) or what you pay your spouse to watch your kids. If you’re paying your spouse to watch their own child, you might want to find a new spouse (sorry, just saying).
- If you’re paying someone to come to your house rather than paying someone who has their own daycare or a sitter who has her own business, you may owe the government more because you’re an official employer. This gets a lot of big important big wigs in trouble just as they’re about to be confirmed as something even bigger and more important, so check this one closely. It might do to even hire an accountant. Just don’t pick this guy.
- The kid being babysat must have lived with you for at least half of 2008. If he hasn’t, why did you need a babysitter?
- Your filing status must be single, married filing jointly, head of household or qualifying widow(er) with a dependent child. In other words? You have to file . . . AND have a kid. Imagine that.
- If you didn’t pay out $3,000 for childcare for your one child, you don’t get a $3,000 credit. If you didn’t pay out $6,000 for two kids or more, you don’t get a $6,000 credit. Those are simply the top end (try telling that to your daycare provider).
There are more tips over at the IRS Website, but these are the biggies. Are you going to be filing for a tax credit for childcare this year? Is it worth it?
Image: No Time For Laundry