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Child care credits: Family matters

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. Can we still claim the child care credit if the caregiver is a relative who lives in our home? K.P., Tarrytown, N.Y.

A. It depends. Generally, you can claim a dependent care credit (commonly called the “child care credit”) for qualified expenses paid to a relative, but not if it’s your spouse, a child under age 19, the child’s parent or a person for whom you (or your spouse) can claim a dependency exemption. It doesn’t matter whether or not the caregiver lives with you.

Tip: The maximum credit for the year is generally $600 for the cost of caring for one child under age 13; $1,200 for two or more children.

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