The child and dependent care credit is available for certain child and dependent care expenses that enable parents to work. The credit may be as much

as $720 in the case of one qualifying individual or $1,440 for more than one qualifying individual. The credit is designed to help ease the tax burden of persons who must work and who also have the responsibility for the care of children or disabled dependents and spouses.

A person claiming this credit must pay someone to care for a qualifying individual so that the claimant can work or look for work. The person must also have earned income from work during the year and must have maintained a home for himself or herself and the qualifying individual.

Tests

To claim the credit, a person must meet all of the following tests.

Qualifying person. Child and dependent care expenses must be for the care of one or more household members who are qualifying persons. A qualifying person is: * A dependent who was under 13

when the care was provided and

for whom an exemption can be

claimed; * A spouse who was physically or

mentally not able to care for himself

or herself; or * Any person who was not able to

care for himself or herself and for

whom exemption can be claimed

(or for whom an exemption could

be claimed, if the person had less

than $2,300 gross income).

Maintenance of a home. To claim the credit, a claimant (and the claimant’s spouse, if married) must keep up a home the claimant lives in with one or more qualifying persons. A home is being kept up when more than half the cost of running it is paid by the claimant.

The term “home” means the main home for both the claimant and the qualifying person. A home can be the main home even if the qualifying person does not five there all year because of birth, death or certain types of temporary absence.

Earned income. To claim the credit, a claimant (and the claimant’s spouse, if married) must have earned income during the year. Earned income includes wages, salaries, tips, other employee compensation, and net earnings from self-employment. Earned income does not include pensions or annuities, Social Security payments, workers’ compensation, interest, dividends, or unemployment compensation.

A special rule covers a student-spouse or spouse not capable of self-care. A spouse is treated as having earned income for any month that he or she is either a full-time student, or physically or mentally not capable of self-care.