Child/Dependent Care Credit Question

Don't have much time this morning, as my six month old woke up sooner than normal from his nap. I wanted to post a question I received yesterday regarding the Child Care Credit real quick though.

I opened an e-mail from a fellow WAHM with the following scenario wanting to know if she was eligible to claim the dependent care credit.

Kate is a work at home mom who runs a daycare in her home. Her husband works outside the home as an electrician. They pay for their child to attend preschool and Kate was curious if she was able to take the credit since she worked out of her home.

The answer is YES! As long as both parents have earned income, receipts for the payments, and the preschool setting was younger than kindergarten, she is eligible to claim the Dependent Care Credit for her preschool aged child.

Unfortunately, not all taxpayers' situation may not be as cut and dry as this one. As always check with the IRS for more detailed information. Information regarding the Child/Dependent Care Credit can be found here.