If you pay someone to take care of your child while you work, you know how the cost of childcare can take a big chunk out of your take-home pay. To help offset this cost, you can claim a credit of up to 35% of the amount you paid for childcare during the tax year.
It's well worth tracking the amount you pay for the care of your child under age 13. If you qualify for the maximum 35% credit, and you pay $4,000 per year in childcare, for example, you may receive up to a $1,400 credit.
The credit is reduced as your income rises.
If your adjusted gross income is over $43,000, you may receive a child and dependent care credit equal to 20% of your expenses.
You, and your spouse if you are married, generally must work or be looking for work to take this credit. You cannot take the credit or exclusion if you have no earned income for the year, unless you or your spouse is a full–time student or are disabled.
You may qualify for a child and dependent care credit for someone other than your child.
If your spouse or another person lived with you for more than half the year and was unable to care for himself or herself, you may be entitled to the credit. A person other than your spouse must be someone who is your dependent, or who would be your dependent except that they have gross income greater than $4,050 or they file a joint return, or you or your spouse can be claimed as a dependent on someone else's return.
A person is unable to care for himself or herself if physical or mental problems prevent the person from dressing, cleaning, or feeding themselves, or if they need constant attention to prevent injury to themselves or others.
The child tax credit is in addition to any child and dependent care credit and dependency exemptions for which you qualify.
The credit begins to be reduced when your modified adjusted gross income reaches $75,000 ($110,000 if filing jointly, or $55,000 if married filing separately).
If you have children under age 17 at the end of the tax year, you may qualify for a flat $1,000 per child.
The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them, such as your grandchild, niece, or nephew. He or she must have lived with you for more than half of the year, not provided more than half of his or her own support, and be your dependent, among other requirements. A child is considered to have lived with you for the year if the child was born or died during the year and the child lived with you the entire time he or she was alive.
The child tax credit is generally limited to the amount of income tax you owe.
However, if your child tax credit is greater than your income tax liability, you may qualify for the additional child tax credit. The additional child tax credit is the amount of child tax credit remaining after you apply the credit to your income tax liability or 15% of your earned income over $3,000 for the year, whichever is less. If you have three or more qualifying children, different limits apply to you.
TaxAct calculates the child tax credit on Schedule 8812, and the additional child tax credit if it applies to you.
January 1 — Everyone
Federal Holiday (New Year's Day) Details
January 10 — Employees who work for tips
If you received $20 or more in tips during December, report them to your employer Details
January 15 — Individuals
Make a payment of your estimated tax for 2017 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES Details
January 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in 12-2017
January 15 — Everyone
Federal Holiday (Birthday of Martin Luther King, Jr./Inauguration Day) Details
January 15 — Farmers & fishermen
Pay your estimated tax for 2017 using Form 1040-ES Details
January 31 — All Employers
Give your employees their copies of Form W2 for 2017. If an employee agreed to receive Form W2 electronically, have it posted on a website and notify the employee of the posting.
January 31 — Individuals who must make estimated tax payments
If you did not pay your last installment of estimated tax by 01-15, you may choose (but are not required) to file your income tax return (Form 1040) for 2017 by 01-31. Filing your return and paying any tax due by 01-31 prevents any penalty for late payment of the last installment. If you cannot file and pay your tax by 01-31file and pay your tax by 04-15.
January 31 — Payers of gambling winnings
If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W2G.
January 31 — Social Security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2017. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until 02-10 to file the return.
January 31 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2017. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more for 2017 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until 02-10 to file the return.
January 31 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2017. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until 02-10 to file the return.
January 31 — Federal unemployment tax
File Form 940 for 2017. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you deposited the tax for the year timely, properly, and in full, you have until 02-10 to file the return.
January 31 — All businesses
Give annual information statements to recipients of certain payments you made during 2017 Details