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Wednesday, January 23, 2013

Child and Dependent Care Credit

The child and dependent care tax credit were permanently extended for taxable years beginning in 2013. A dependent (defined as being under age 13 at the end of the tax year OR incapable of self-care) that requires paid care in order for you to work (or look for work), may qualify for a credit up to $1,050 or 35% of $3,000 of eligible expenses. For two, or more, qualifying dependents, you can claim up to 35% of $6,000 (or $2,100) of eligible expenses. With higher income earners the credit % is reduced, but not below 20%, regardless of amount of adjusted gross income.

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