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Tuesday, 07 July 2015 19:49

Day camps and day care

What do day camps, nannies and preschool have in common? Each one can make you eligible for Child and Dependent Care Tax Credits which may lower both your state and federal taxes.

The Federal Child and Dependent Care Credit is a non-refundable credit. To take advantage of the credit you need to have some tax liability. Maine's Child Care Credit is refundable. However, Maine's Child Care Credit is a percent of the Federal Child and Dependent Care Credit, so without a federal credit, there is no state credit. The credit is figured on up to $3,000 of eligible expenses for one qualifying dependent and up to $6,000 for two or more qualifying dependents. The credit is worth between 20 and 35 percent of the eligible expenses. While the percentage goes down with increasing income, there is no income cap on claiming the credit.

Published in Money

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