Disclaimer

Tab G 1-2 Child & Dependent Care Credit

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Warning:  this credit is frequently confused with the "Child Credit," an entirely different tax credit!

The Child & Dependent Care credit is sometimes informally called the "daycare credit."  Taxpayers who need to pay for care for young dependent children (under 13) or a disabled dependent or a disabled spouse in order to work can use this credit.

At the federal level, it is a non-refundable credit, which means that it is only helpful to taxpayers who have a positive tax liability on line 44.

However, the corresponding NYS credit is refundable, which means that it is always worth putting in any information on allowable daycare expenses into TaxWise, because the taxpayer may get state credits, even s/he doesn't get any federal tax benefit.

The amount of the Child & Dependent Care Credit, if any, should be reported on line 48.  TaxWise will help you calculate the amount if you check the DC box on the Main Info screen on the line containing the name of the dependent for whom daycare expenses were paid.

More information is available on Form 2441 and Instructions for Form 2441.


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