Did you know that day camp may qualify as day care for the Child and Dependent Care Credit. This does not apply to overnight camp. As you are planning for summer care for your dependents, you may be eligible for this credit.
To take this credit, you will need the daycare provider's full name, address, social security number or Federal Employer ID number, and the amount paid for the day care expense. The Expense limit is $3,000 per dependent or $6,000 if there are two or more qualifying dependents.
The Federal credit percentage used to calculate the credit (20 -35 percent) is based on Adjusted Gross Income (AGI). The maximum credit for federal would be $1,050 for one child. The percentage rate decreases as the AGI increases.
If you qualify for the federal credit, you may also qualify for the Oregon credit which is based on a percentage of Taxable Income. The Oregon credit phases out at $45,000 of taxable income.
This is a non-refundable credit, but it can be carried forward for the next 5 years.
There are other rules regarding eligibility for this credit, including (but not limited to) earned income, age of the dependent, age of the provider, relationship of the provider to the taxpayer/dependent, and custody of the dependent, and whether you have day care assistance from your employer's plan.
If you have questions about deductibility of day care expenses, please call our office and talk to one of our licensed tax preparers.
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