Tax Credits for Working Parents
If you have a child and you work or are looking for work, you may be eligible for the Child and Dependent Care Credit when you do your taxes. This credit can help to defray the cost of child care for working parents. To maximize your credit, you'll need to know the requirements for claiming it and what expenses you're legally allowed to write off.
In order to be eligible for the tax credit, you must have earned income and pay for child care out of your own pocket. The person you pay for child care can't be your spouse or someone you claim as a dependent, and if you're married, you must both work or be looking for work [source: 1040]. If that sounds like you, the next step is to determine which of your expenses qualify as child care expenses.
The Child and Dependent Care Credit covers everything from housekeeping expenses to educational costs as long as they are related to the care of a child. You can write off the cost of babysitting in addition to the cost of nursery school. If you're a working parent with a lower income, the odds are good that you'll qualify for at least a partial credit. The maximum you can claim is $3,000 for one child and $6,000 for two or more, and the amount you do claim cannot exceed your total income for the year.
As a parent, you may also be eligible for a child tax credit. If your children are under the age of 17, live with you more than half the year and don't provide more than half of their own monetary support, you can get a $1,000 tax credit per child. In some cases, you may even be able to get a refund if your tax credit is more than what you owe [source: Turbo Tax].
Aside from tax credits, working parents may also be eligible for financial assistance. Keep reading to find out what your options are.