Ask CPA Sam

Q. How can I determine whether or not I am eligible/qualify  for the child or dependent care expenses deduction?  I have a child that I claim –18 yrs old live at  home—  I receive support from his mother – we are divorced.

A. The IRS has very specific requirements regarding to gets to claim the Child and Dependent Care Credit.  In fact, there is an entire chapter (32) of Publication 17 devoted to it.  The basic requirements you must meet in order to be eligible for this credit follows:

Eligibility requirements:

• The care must be for one or more qualifying persons who are identified on the form you use to claim the credit.
• You (and your spouse if you are married) must have earned income during the year.   There are special exceptions to this one that are linked from Pub 17.
• You must pay child and dependent care expenses so you (and your spouse if you are married) can work or look for work.
• You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. You cannot make payments to:a. Your spouse, or The parent of your qualifying child who is your qualifying person and under age 13
• Your filing status must be single, head of household, qualifying widow(er) with dependent child, or married filing jointly. You must file a joint return if you are married, unless an exception applies to you.
• You must identify the care provider on your tax return. If you exclude or deduct dependent care benefits provided by a dependent care benefits plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the amount you can exclude or deduct is limited to $5,000.)

A qualifying person is:

1. Your qualifying child who is your dependent and who was under age 13 when the care was provided ,
2. Your spouse who was physically or mentally not able to care for himself or herself and lived with you for more than half the year, or
3. A person who was physically or mentally not able to care for himself or herself, lived with you for more than half the year, and either:
   1. Was your dependent, or
   2. Would have been your dependent except that:
      1. He or she received gross income of $3,400 or more,
      2. He or she filed a joint return, or
      3. You, or your spouse if filing jointly, could be claimed as a dependent on someone else’s 2007 return.

• The person receiving the care must have lived with you for more than six months of the tax year.

So…in the case that you presented, unless, this child is physically or mentally not able to care for him/herself, then you do not have a qualifying child and there is no way to take the Dependent Care Deduction on your tax return.  Check with your tax adviser in case there are any special circumstances that may change this response.