This publication explains the tests you must meet to claim the credit for child and dependent care expenses. It explains how to figure and claim the credit.
You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who isn't able to care for himself or herself. The credit can be up to 50% of your employment-related expenses. To qualify, you must pay these expenses so you (and your spouse if filing jointly) can work or look for work.
Can You Claim the Credit?
To be able to claim the credit for child and dependent care expenses, you must file Form 1040, 1040-SR, or 1040-NR, and meet all the tests in Tests you must meet to claim a credit for child and dependent care expenses next.
Tests you must meet to claim a credit for child and dependent care expenses.
To be able to claim the credit for child and dependent care expenses, you must meet all the following tests.
Qualifying Person Test. The care must be for one or more qualifying persons who are identified on Form 2441. (See Who Is a Qualifying Person, later.)
Earned Income Test. You (and your spouse if filing jointly) must have earned income during the year. (However, see Rule for student-spouse or spouse not able to care for self under You Must Have Earned Income, later.)
Work-Related Expense Test. You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. (See Are These Work-Related Expenses, later.)
You must make payments for child and dependent care to someone you (and your spouse) can't claim as a dependent. If you make payments to your child (including stepchild or foster child), he or she can't be your dependent and must be age 19 or older by the end of the year. You can't make payments to:
a)Your spouse, or
b)The parent of your qualifying person if your qualifying person is your child and under age 13.
See Payments to Relatives or Dependents under Are These Work-Related Expenses, later.
Joint Return Test. Your filing status may be single, head of household, or qualifying widow(er) with dependent child. If you are married, you must file a joint return, unless an exception applies to you. See What’s Your Filing Status, later.
Provider Identification Test. You must identify the care provider on your tax return. (See Care Provider Identification Test, later.)
If you exclude or deduct dependent care benefits provided by a dependent care benefit plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $8,000 if you had one qualifying person or $16,000 if you had two or more qualifying persons). (If you had two or more qualifying persons, the amount you exclude or deduct will always be less than the dollar limit because the total amount you can exclude or deduct is limited to $10,500.
Who Is a Qualifying Person?
Your child and dependent care expenses must be for the care of one or more qualifying persons.
A qualifying person is:
1.-Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart, later);
2.-Your spouse who wasn't physically or mentally able to care for himself or herself and lived with you for more than half the year; or
3.-A person who wasn't physically or mentally able to care for himself or herself, lived with you for more than half the year, and either:
a)Was your dependent, or
b)Would have been your dependent except that:
i.He or she received gross income of $4,300 or more,
ii.He or she filed a joint return, or
iii.You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2021 return.
Dependent defined. A dependent is a person, other than you or your spouse, for whom you could claim an exemption. To be your dependent, a person must be your qualifying child (or your qualifying relative). However, the deductions for personal and dependency exemptions for tax years 2018 through 2025 are suspended, and, therefore, the amount of the deduction is zero. But, in determining whether you may claim a person as a qualifying relative for 2021, the person's gross income must be less than $4,300.
Qualifying child. To be your qualifying child, a child must live with you for more than half the year and meet other requirements.
Physically or mentally not able to care for oneself. Persons who can't dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves.
Person qualifying for part of year. You determine a person's qualifying status each day. For example, if your child for whom you pay child and dependent care expenses turns 13 years old and no longer qualifies on September 16, count only those expenses through September 15. Also see Yearly limit under Dollar Limit, later.
Birth or death of otherwise qualifying person. In determining whether a person is a qualifying person, a person who was born or died in 2021 is treated as having lived with you for more than half of 2021 if your home was the person's home more than half the time he or she was alive in 2021.
Taxpayer identification number. You must include on your return the name and taxpayer identification number (generally, the SSN) of the qualifying person(s). If the correct information isn't shown, the credit may be reduced or disallowed.
Individual taxpayer identification number (ITIN) for aliens. If your qualifying person is a nonresident or resident alien who doesn't have and can't get an SSN, use that person's ITIN. The ITIN is entered wherever an SSN is requested on a tax return. If the alien doesn't have an ITIN, he or she must apply for one. See Form W-7, Application for IRS Individual Taxpayer Identification Number, for details. An ITIN is for tax use only. It doesn't entitle the holder to social security benefits or change the holder's employment or immigration status under U.S. law.
Adoption taxpayer identification number (ATIN). If your qualifying person is a child who was placed in your home for adoption and for whom you don't have an SSN, you must get an ATIN for the child. File Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions.
Child of divorced or separated parents or parents living apart. Even if you can't claim your child as a dependent, he or she is treated as your qualifying person if:
The custodial parent is the parent with whom the child lived for the greater number of nights in 2021. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income.
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