If you paid someone to care for a qualifying individual so you (and your spouse if you are married) could work or look for work, you may be able to claim the credit for child and dependent care expenses. If you are married, both you and your spouse must have earned income, unless one spouse was either a full-time student or was physically or mentally incapable of self-care. The expenses you paid must have been for the care of one or more of the following qualifying individuals:

1. Your dependent who was under the age of 13 when care was provided and for whom you can claim an exemption. (For an exception to the exemption rule, see Child of Divorced or Separated Parents in Publication 503.)
2. Your spouse who is mentally or physically not able to care for himself or herself; or
3. Your dependent who was physically or mentally not able to care for himself or herself, and for whom you can claim an exemption (or could claim an exemption except the person had $2,800 or more of gross income).

In addition to the conditions just described to take the credit, you must meet all the following conditions:

1. The qualifying person must have lived with you in a home kept up by you (and your spouse, if you are married).
2. You must provide the taxpayer identification number (usually the social security number of the qualifying person.
3. Your filing status must be a status other than married filing separate. (You must file a joint return if you are married.)
4. The payments for care cannot be paid to someone you can claim as your dependent, or to your child who is under age 19, or who you can claim as a dependent.
5. You must report the name, address, and taxpayer identification number (either the social security number or the employer identification number) of the care provider on your return. You can use Form W-10, Dependent Care Provider's Identification and Certification, to request this information from the care provider.

If you qualify for the credit, use Schedule 2 of Form 1040A, or Form 2441 with Form 1040. If you received dependent care benefits from your employer (this amount should be shown in Box 10 of your 1999 Form W-2), you must complete Part III of Schedule 2 (Form 1040A) or Form 2441. You cannot use Form 1040EZ if you claim the child and dependent care credit.

The credit is a percentage, based on your adjusted gross income, of the amount of work-related child and dependent care expenses you paid to a care provider. You may use up to $2,400 of the expenses paid in a year for one qualifying individual, or $4,800 for two or more qualifying individuals. These dollar limits must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from your income. See Publication 503, Child and Dependent Care Expenses, for additional information.

If you pay someone to look after your dependent or spouse in your home, you may be a household employer. If you are, you may have to withhold and pay social security and Medicare tax and pay federal unemployment tax. For information on this subject see Publication 926, Household Employer's Tax Guide, or Topic 756 and Topic 760.

For information on the Child Tax Credit refer to Publication 17, Your Federal Income Tax.

Publications may be ordered by calling 1-800-829-3676, or downloaded from the Forms and Publications section of this web site.

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