Flickr: Photo by AMagill
Flickr: Photo by AMagillIncome tax day is coming up fast, and if you're anything like me, you're still wading through all the paperwork.
The latest bit of information I realized I was missing? My nursery school provider's tax ID number so I can apply for the childcare tax credit.
Not to be confused with the tax credit we parents receive when we declare our children as our dependants, the childcare tax credit is strictly for parents who pay for someone to watch their kids -- and it can't be your 14-year-old.
In fact, the money must be paid to someone who you yourself can't claim as a dependent -- and it can only be for kids under 13 (or older kids who are not physically or mentally able to care for themselves). So if you have a 14-year-old who you just don't trust, you're out of luck.
What's more -- the only care you can write off is that used in order to facilitate being a working parent. A babysitter watching your kids so you can have a date night with your partner doesn't count. Nor does a housekeeper who just so happens to occasionally watch the kids when you're in a jam.
Further complicating matters are the IRS' rules on just how much you can use to offset your income tax.
If one child was cared for, you can deduct up to $3,000; up to $6,000 if two or more children were cared for. But don't expect to get all of that back -- the total you deduct has to equal just 20 percent of what you paid.
So what's the good news? Many parents forget to discount nursery school or private kindergarten expenses (in states where kindergarten is not mandatory). If your child is attending one or the other while you're working, that's childcare.
President Obama recenlty proposed a hike in the credit, but there's been no change -- at least for this year.
Do you take the childcare tax credit?