Schedule 2

Description

Relates to Form 1040A. Attach to Form 1040A if you are claiming the child or dependent care credit or received dependent care benefits from your employer.

You generally qualify for the credit if (1) your child is under the age of 13 or your child or spouse is physically or mentally incapable of self-care, (2) you must be working or looking for work, (3) if married, your spouse must be working or looking for work (unless your spouse if a full-time student), and (4) you, and your spouse if you are married, must have earned income (wages, self-employment earnings, tips, etc.)

For divorced or separated parents, the custodial parent usually claims the dependent care credit even if the noncustodial parent gets to claim the child as a dependent on his or her tax return.

Qualifying child care expenses include expenses for day care providers, nursery school, day camp, and after-school day-care programs. Overnight camps do not qualify. Before 1st grade you can deduct all schooling costs as child care costs. However, when the child enters 1st grade, tuition paid must be allocated between educational expense and child-care expense.

Payments made to relatives for child care expenses usually qualify for the credit. No credit is alowed if the relative can be claimed as a dependent on your tax return or if the relative is your own child who is under age 19. For example, if your 20 year old child (who is not a dependent on your tax return) provides child care for your 11 year old child, then the child care expenses qualify for the credit.

You must provide the name, address, and tax identification number (social security number) of any care provider in order to take the credit.

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