How much will the IRS return in Child Care Expenses?

My husband and I have 5 kids. My husband works and I stay home with the smaller kids. With the economy slumping down fast, so is our finances. I need to work ASAP. But we figured, if I worked, I will only make enough to pay the child care expenses, maybe less. If the Child and Dependent Care Expenses Credit kicks in during tax season, maybe it will be worth it. What percentage of the Child Care Expenses will the IRS return? I came across another question here and I was wondering wha it is about -- Preax $5000 credit? http://answers.yahoo.com/question/index;_ylt=AjBpaopkYCnRfxewF3qSZVMAAAAA;_ylv=3?qid=20071024170503AAYVKrC

Public Comments

1. 20% to 30% depending on total income, but the credit is based on the lower of child care costs or the lower income.

   Helen, EA in PA



2. The credit is based first on up to $6000 of expenses per tax return. This is usually $3000 for each of 2 children, but if you have more than it still would be a total of $6000 for the return.

   Next there is a chart to determine what percentage of this $6000 you are allowed to deduct. It varies from 35% to 20%. The more your income the less the deduction. Also each of you would have to have income of at least the amount of the expenses.

   Check the second link below to see how much of a % you will qualify for based on your AGI. If your AGI is $43000 or over you would qualify for a credit of 20% of the qualifying expenses, therefore a credit of $1200 if the expenses were $6000.

   Laura H – H&R Block – Senior Tax Advisor 5

   **This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided.



3. 20%-35% of the first $3000 per child for up to 2 children.

   In English:

   With 2 or more kids in Daycare, the credit on the tax return is between $1200 and $2100. Far less than you will probably spend.



4. have you thought about doing daycare yourself as a way to make extra money... thats what I do so I dont have to pay child care for our two children, but still make some money... or you can look into assistance for childcare depending on how much you make. ( you diffently need alot of patients though to run a daycare )