For what type of expenses can parents claim the Child and Dependent Care Credit?

The Child and Dependent Care Credit is specifically designed to assist working parents or guardians by providing a tax credit for certain expenses associated with the care of children and other dependents while the parent is working or actively seeking employment. This aligns with the purpose of the credit, which is to alleviate some of the financial burden of child care, enabling parents to participate in the workforce.

Expenses that qualify for this credit include costs for daycare, babysitting, and other types of care that are necessary for the care of a dependent child under the age of 13 or for a spouse or dependent who is incapable of self-care. These costs must be incurred to allow the parent to work or look for work, reinforcing the direct connection between care expenses and earning income.

In contrast, expenses associated with entertainment and leisure, home repairs while children are present, or general childcare expenses that do not directly relate to work are not eligible for this specific tax credit. Such expenses do not meet the criteria set forth by the IRS for this credit, which focuses strictly on the need for care to enable work-related activities.