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If you paid someone to care for your child, spouse, or dependent last year, you may be able to claim the Child and Dependent Care Credit on your federal income tax return if you paid someone to care for your child, your spouse or your dependent this past year. If you qualify, you can claim up to 35% of your gross adjusted income, taking up to $3,000 for one qualiftying individual and up to $6,000 for two.
Note that you must reduce your claim by the amount of any dependent care benefits (provided by an employer) that you deduct from your income.
Also, if you pay someone to come into your home and provide care, you may be a "houehold employer". As such, you'll be required to withold and pay social security and medicare tax as well as federal unemployment tax.
Claiming a credit for child and dependent care is - like most of the IRS tax code - complex. Have a look through the points below, and call us if you need any help with your child and dependent care claims.
There are exceptions for the birth or death of a qualifying person, or a child of divorced or separated parents. See the IRS Publication 503, Child and Dependent Care Expenses for complete details.
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