Child and Dependent Care Credit & flexible benefit plans

No, tuition for kindergarten isn't a qualifying expense for the child and dependent care credit because expenses to attend kindergarten or a higher grade are educational expenses rather than childcare expenses.

However, the expenses for a before- or after-school care program of a child in kindergarten or a higher grade may qualify, even though the expense of school tuition doesn't qualify.
 

• Am I eligible to claim the child and dependent care credit?
• Tax Topic 602 - Child and Dependent Care Credit
• Publication 503, Child and Dependent Care Expenses

When you are eligible to participate in a dependent care assistance program through your employer and you choose to participate, your employer has to report that value in box 10 of your Form W-2. This type of plan is a voluntary agreement to reduce your salary in return for an employer-provided fringe benefit. Your employer will also include in your wages shown in box 1 of your Form W-2 any dependent care benefits that exceed the maximum amount of dependent care benefits allowed to be excluded. The maximum amount is $5,000 ($2,500 if married filing separately).

You're receiving a tax benefit because under the plan, you're not paying taxes on the money set aside to pay for the dependent care expenses.

You must complete and attach Form 2441, Child and Dependent Care Expenses to your tax return.

• Instructions for Form 2441, Child and Dependent Care Expenses (PDF)
• Publication 503, Child and Dependent Care Expenses

Yes, you may still claim the child and dependent care credit when you're missing the provider's Social Security number or other taxpayer identification number by demonstrating due diligence in attempting to secure this information.

Claim the childcare expenses on Form 2441, Child and Dependent Care Expenses and provide the care provider's information you have available (such as name and address). Write "See Attached Statement" in the columns corresponding to the missing information. Explain on the attached statement that you requested the provider's identifying number, but the provider didn't give it to you. This statement supports the exercise of due diligence in trying to secure the identifying information for the claim.

• Form W-10, Dependent Care Provider's Identification and Certification (PDF)
• Instructions for Form 2441, Child and Dependent Care Expenses (PDF)
• Publication 503, Child and Dependent Care Expenses
• Am I eligible to claim the child and dependent care credit?
• Tax Topic 602 - Child and Dependent Care Credit

These payments may be qualified childcare expenses if the family member babysitting isn't your spouse, the parent of the child, your dependent, or your child under age 19, and if you otherwise qualify to claim the child and dependent care credit.

Who's responsible for paying employment taxes on these payments depends on whether your family member is your employee or is self-employed (an independent contractor).

• See Publication 15-A, Employer's Supplemental Tax Guide for a general discussion of how to determine whether an individual who is performing services for you is an employee or an independent contractor.
• Special rules apply to family employees generally, and to family employees who perform household work (including babysitting) in your home. For more information on these rules, see Publication 15 (Circular E), Employer's Tax Guide and Publication 926, Household Employer's Tax Guide.
• If your family member is your employee and no exceptions apply, then you're generally responsible for withholding the employee's share of employment taxes and paying the employer's share of employment taxes.
• If your family member isn't your employee, then the family member will be responsible for paying any applicable self-employment taxes on the income earned.

• Publication 503, Child and Dependent Care Expenses
• Tax Topic 756 - Employment taxes for household employees
• Tax Topic 762 - Independent contractor vs. employee
• Form 2441, Child and Dependent Care Expenses (PDF)
• Tax Topic 602 - Child and Dependent Care Credit

Daycare payments for services provided outside your household to an elderly person who regularly spends at least 8 hours each day in your household may qualify as dependent care expenses if the person is incapable of self-care, lives with you for more than one-half of the tax year, and is either your spouse or a dependent. Additional requirements apply to services performed by a dependent care center.

• Tax Topic 602 - Child and Dependent Care Credit
• Publication 503, Child and Dependent Care Expenses
• Am I eligible to claim the child and dependent care credit?