Who can claim the child care credit?

Under federal law, the child care credit may be claimed on either a joint tax return or on a separate return by a person eligible as “Head of Household.”

The child care credit provides tax credits based on income levels for employment-related child care expenses up to $3,000 for 1 child or $6,000 for 2 or more children.

This credit is separate from the “child credit” of $1,000.00 per child per year, which is provided to the parent who claims the dependency exemption.

To qualify as “Head of Household,” you must maintain a home that was the principal home of your child for more than one-half of the tax year, be eligible to claim the dependency exemption for that child, furnish more than one-half of the costs to maintain the home and must not have resided with the other parent for the last 6 months of the tax year.

Unlike the dependency exemption, the custodial parent cannot transfer the child care credit to the non-custodial parent.