Have a Tax Question? Ask a Tax Expert
Hi and welcome to Just Answer!
Yes - you may claim Child and Dependent Care Credit for your disabled son if your dependent who was physically or mentally incapable of self-care and who had the same principal place of abode as you for more than half of the year.
If you paid for the care of a qualifying individual so that you (and your spouse if you are married) could work or look for work, you may be able to claim the child and dependent care credit. If you are married, both you and your spouse must have earned income, unless one spouse either was a full-time student for 5 months of the tax year or was physically or mentally incapable of self-care. An individual is physically or mentally incapable of self-care if, as a result of a physical or mental defect, the individual is incapable of caring for his or her hygiene or nutritional needs, or requires the full-time attention of another person for the individual's own safety or the safety of others.
The credit is generally a percentage of the amount of work-related child and dependent care expenses you paid to a care provider. The percentage depends on your adjusted gross income. The total expenses qualifying for the credit are capped at $3,000 (if you had one qualifying individual) or at $6,000 (if you had two or more qualifying individuals), and may not exceed the lesser of your and your spouses earned incomes.
Let me know if you need any help with reporting.
THANK YOU ! SO, IF MY HUSBAND AND I ARE WORKING IN OUR OWN SOLE MEMBER LLC (WITH MY HUSBAND AS OWNER), THE DEDUCTION (UP TO 3K) WILL BE BASED UPON WHATEVER SALARY I MAKE AS AN EMPLOYEE, ASSUMING I AM THE LESSER INCOME? ALSO, DOES THE MONEY WE GET FROM THE STATE FOR CARE GET CONSIDERED IT THE TOTAL DEDUCTION WHICH IS UP TO $3000.?
You are eligible to claim the credit if you and your spouses have earned incomes.
The earned income includes both - wages and net self-employment income.
So as long as you have income from self-employment and pay self-employment taxes - you might be eligible for the credit.
If you do not have earned income - there might be an issue - you would need to proof that you are working or looking for work.
I am not clear about the money you are getting from the state...
If you are paid by the state to take care for your son and these are nontaxable payments - you need to deduct that amount when determine the credit.
If the state pays directly to the caregiver on behalf of your son - you need to deduct that amount when determine the credit.
If state payments are taxable for you - they do not affect your eligibility.
Thank you. You are clear in that the state pays caregiver on behalf of our son and it is not taxable to him or to us as his parents. It is taxable to the caregiver. That said, and all things considered, I take your response to mean that this must be deducted from the maximum credit of 3000. not 6000. ?
The total expenses qualifying for the credit are capped at $3,000 (if you had one qualifying individual) or at $6,000 (if you had two or more qualifying individuals), and may not exceed the lesser of your and your spouses earned incomes.
So - if you have only ONE dependent - $3000 is the maximum.