JK Harris: Child and Dependent Care Credit Can Help Reduce Taxes

From: JK Harris & Company, LLC
Published: Fri Mar 11 2005

NORTH CHARLESTON, S.C. – We all know that child and dependent care costs are very costly and seem to be rising by the minute. Well, the IRS has a tax credit to help reduce the income tax you owe, according to JK Harris, the nation’s largest and most successful tax resolution firm.

"The Child and Dependent Care Credit can provide a substantial savings to a taxpayer who meets the conditions necessary," said Mary Rivera, a JK Harris Enrolled Agent. "With the high cost of health care and nursing facilities more people are having to care for their parents. This credit can provide some relief."

According to the IRS, this credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13. The credit is also available if you paid for care of a spouse or a dependent of any age that is physically or mentally incapable of self-care.

The credit is a percentage, based on your adjusted gross income, of the amount of work-related child and dependent care expenses you paid to a care provider. The credit can range from 20 to 35 percent of your qualifying expenses, depending upon your income. For 2004, you may use up to $3,000 of the expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals. The qualified amount will be reduced by any dependent care benefits provided by your employer that you exclude from your income.

There are, of course, certain conditions that must be met before the credit can be taken. Listed below are a few of these:

(1) You must have earned income from wages, salaries, tips or other taxable employee compensation, or net earnings from self-employment. If you are married, both you and your spouse must have earned income, unless one spouse was either a full-time student or was physically or mentally incapable of self-care.
(2) The payments for care cannot be paid to someone you can claim as your dependent on your return or to your child who is under age 19.
(3) Your filing status must be single, head of household, qualifying widow(er) with a dependent child, or married filing jointly.
(4) The care must have been provided for one or more qualifying persons identified on the form you use to claim the credit.
(5) You (and, if you're married, your spouse) must maintain a home that you live in with the qualifying child or dependent.

JK Harris & Company, LLC (www.jkharris.com) is based in North Charleston, S.C. JK Harris & Company is the nation’s largest tax resolution company with over 470 satellite offices in 45 states and has serviced over 130,000 clients since its founding in 1997 by John K. Harris. JK Harris also provides services for consumer and commercial debt, student loan debt, investment fraud, financial planning, small business services, mortgage services, tax return preparation, and assisting individuals who require support for an IRS audit.
Company: JK Harris & Company, LLC
Contact Name: Josh Baker
Contact Email: jobaker@jkharris.com
Contact Phone: 843-576-2255

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