Can I Claim Dependent Care Expenses for a Disabled Granddaughter?
The child and dependent care credit is available to taxpayers who support and pay child care or dependent care expenses for a dependent or spouse. A grandparent who supports a grandchild can take advantage of this deduction, as long as the child meets the requirements of a qualifying person. Although you cannot claim the entire amount, you can claim a percentage, which is based on your adjusted gross income.
About the Credit
The dependent care credit enables you to deduct up to 35 percent of the cost to have someone else care for your disabled dependent while you work or look for work. You must have earned income for the year to claim the credit. If you are married, you cannot claim the credit if you file separately from your spouse.
For your granddaughter to qualify as a qualifying person and meet the requirements of the dependent care credit, she must either be under age 13 or be any age and unable to care for herself. Your granddaughter must have lived with you for more than half the year. In addition, she must qualify as your dependent or would have qualified except she filed a joint return, she received income that exceeded the annual exemption amount, which is $3,900 as of 2013, or you and your spouse could be claimed on another taxpayer's return.
Amount of the Credit
Your income plays a large part in the amount you can claim for the child and dependent care credit. Based on a percentage, the most you can claim is 35 percent with an adjusted gross income of $15,000, and the least is 20 percent with an adjusted gross income over $43,000. After the initial $15,000 at a 35 percent credit, the percentage allowance drops 1 percent for every $2,000 you earn, until you reach the 20 percent allowance. The IRS also imposes a limit to the amount you can claim for the credit. For one person, you can claim a maximum credit of $3,000, or for two or more people, you can claim $6,000.
Claiming the Credit
To claim the child and dependent care credit, you must file your taxes using Form 1040A or Form 1040. You must complete and attach Form 2441, which is the form that helps to calculate your credit. You must provide the name and Social Security number or employer identification number of the care provider on Form 2441. After calculating your credit, transfer the amount to the line labeled, "Credit for Child and Dependent Care Expenses," on Form 1040A or Form 1040.
Angela M. Wheeland specializes in topics related to taxation, technology, gaming and criminal law. She has contributed to several websites and serves as the lead content editor for a construction-related website. Wheeland holds an Associate of Arts in accounting and criminal justice. She has owned and operated her own income tax-preparation business since 2006.