|
The tax act
increases the amount of eligible child & dependent care expenses (see
table 1 below). Also, beginning in tax year 2003, the maximum child &
dependent care credit allowed for eligible expenses increases from 30% to
35%. The credit decreases 1% for EACH $2,000 (or fraction thereof) that
the taxpayer's adjusted gross income EXCEEDS $15,000, and bottoms out at a
minimum of 20% (see table 2 below). |
|
Table 2 - Child & Dependent Care Credit Percentage |
|
If the adjusted gross
income is .... |
Multiply the eligible
expenses by .... |
|
$0 - $15,000 |
.35 |
|
$15,001 - $17,000 |
.34 |
|
$17,001 - $19,000 |
.33 |
|
$19,001 - $21,000 |
.32 |
|
$21,001 - $23,000 |
.31 |
|
$23,001 - $25,000 |
.30 |
|
$25,001 - $27,000 |
.29 |
|
$27,001 - $29,000 |
.28 |
|
$29,001 - $31,000 |
.27 |
|
$31,001 - $33,000 |
.26 |
|
$33,001 - $35,000 |
.25 |
|
$35,001 - $37,000 |
.24 |
|
$37,001 - $39,000 |
.23 |
|
$39,001 - $41,000 |
.22 |
|
$41,001 - $43,000 |
.21 |
|
$43,001 & UP |
.20 |
|
Example:
Assume you have one child and paid $2,875 to a child care
provider. Your adjusted gross income is $33,550. Your child
care credit will be $718.75 ($2,875 X .25). |
|
|
