1. Expenses must be for the care of one or more dependent child under age 13. You can take the “Qualifying Person Test” using Publication 503.
2. Expenses for care must be work-related. You must pay for care so you can work or look for work. This rule also applies to your spouse if you file a joint return, they are a full-time student, or if they are physically or mentally incapable of self-care.
3. You must have earned income, such as from wages, salaries and tips. It also includes net earnings from self-employment. If you file jointly, your spouse must also have earned income, unless they are a full-time student or incapable of self-care.
4. If you are married, you must file a joint return to take the credit. There are exceptions if you are legally separated, or if you and your spouse live apart.
5. Care in your home, at a daycare facility, or at a day camp may qualify you for the credit.
6. The credit is a percentage of the qualified expenses you pay. It can be as much as 35 percent of your expenses, depending on your income.
7. The total expense that you can use for the credit in a year is limited. The limit is $3,000 per child, to a maximum of $6,000 for two or more children.
8. Overnight camp or summer school tutoring costs do not qualify. You also cannot include the cost of care that was provided by your spouse or by a person you can claim as your dependent.
9. Receipts and records must be kept. Make sure to note the name, address and tax identification number of the care provider. You must report this information when you claim the credit on your tax return.
10. This credit is not just a summer tax benefit. You may be able to claim it for childcare throughout the year.
IRS Publication 503, Child and Dependent Care Expenses, has more details about how you can qualify for this credit.