Child & Dependent Care Credit
Scams Relating to Orlando Mass Shooting
Small Business Health Care Tax Credit
Keep in Mind the Child &
Dependent Care Credit this Summer
camps are common during the summer months.
Many parents enroll their children in a day camp or pay for
day care so they can work or look for work. If this applies to
you, your costs may qualify for a federal tax credit.
Here are 10 things to know
about the Child and Dependent Care Credit:
Care for Qualifying Persons.
Your expenses must be for the care of one or more qualifying
persons. Your dependent child or children under age 13
Your expenses for care must be work-related. In other words,
you must pay for the care so you can work or look for work.
This rule also applies to your spouse if you file a joint
return. Your spouse meets this rule during any month they are
a full-time student. They also meet it if they are physically
or mentally incapable of self-care.
Earned Income Required.
You must have earned income. Earned income includes wages,
salaries and tips. It also includes net earnings from
self-employment. Your spouse must also have earned income if
you file jointly. Your spouse is treated as having earned
income for any month that they are a full-time student or
incapable of self-care.
Joint Return if Married.
Generally, married couples must file a joint return. You can
still take the credit, however, if you are legally separated
or living apart from your spouse.
Type of Care. You may
qualify for the credit whether you pay for care at home, at a
daycare facility or at a day camp.
Credit Amount. The credit
is worth between 20 and 35 percent of your allowable expenses.
The percentage depends on your income.
Expense Limits. The total
expense that you can use in a year is limited. The limit is
$3,000 for one qualifying person or $6,000 for two or more.
Certain Care Does Not Qualify.
You may not include the cost of certain types of care for the
tax credit, including:
Overnight camps or summer school tutoring costs.
Care provided by your spouse or your child who is under age 19
at the end of the year.
Care given by a person you can claim as your dependent.
Keep Records and Receipts.
Keep all your receipts and records for when you file taxes
next year. You will need the name, address and taxpayer
identification number of the care provider. You must report
this information when you claim the credit on Form 2441, Child
and Dependent Care Expenses.
Dependent Care Benefits.
Special rules apply if you get dependent care benefits from
Keep in mind this credit is not just a summer tax benefit. You
may be able to claim it at any time during the year for
qualifying care. IRS Publication 503, Child and Dependent Care
Expenses, provides complete details on all the rules. Get it
anytime on IRS.gov.
Consumers of Possible Scams Relating to Orlando Mass Shooting
Internal Revenue Service issued a consumer alert about
possible fake charity scams emerging due to the mass shooting
in Orlando, FL, and encouraged taxpayers to seek out
recognized charitable groups.
When making donations to assist
victims of last weekend's terrible tragedy, there are simple
steps taxpayers can take to ensure their hard-earned money
goes to legitimate charities. IRS.gov has the tools taxpayers
need to quickly and easily check out the status of charitable
While there has been an enormous wave of support across the
country for the victims and families of Orlando, it is common
for scam artists to take advantage of this generosity by
impersonating charities to get money or private information
from well-meaning taxpayers. Such
fraudulent schemes may involve contact by telephone, social
media, e-mail or in-person solicitations.
The IRS cautions donors to follow these tips:
Be sure to donate to recognized charities.
Be wary of charities with names that are similar to familiar
or nationally known organizations. Some phony charities use
names or websites that sound or look like those of respected,
legitimate organizations. The IRS website at IRS.gov has a
search feature, Exempt Organizations Select Check, through
which people may find qualified charities; donations to these
charities may be tax-deductible.
Don't give out personal financial information — such as Social
Security numbers or credit card and bank account numbers and
passwords — to anyone who solicits a contribution. Scam
artists may use this information to steal a donor's identity
Don't give or send cash. For security and tax record purposes,
contribute by check or credit card or another way that
provides documentation of the gift.
Consult IRS Publication 526, Charitable Contributions,
available on IRS.gov. This free booklet describes the tax
rules that apply to making tax-deductible donations. Among
other things, it also provides complete details on what
records to keep.
Bogus websites may solicit funds for victims of this tragedy.
These sites frequently mimic the sites of, or use names
similar to, legitimate charities, or claim to be affiliated
with legitimate charities in order to persuade people to send
money or provide personal financial information that can be
used to steal identities or financial resources.
Additionally, scammers often send emails that steer recipients
to bogus websites that appear to be affiliated with legitimate
Taxpayers suspecting fraud by email should visit IRS.gov and
search for the keywords "Report Phishing." More information
about tax scams and schemes may be found at IRS.gov using the
keywords "scams and schemes."
about the Small Business Health Care Tax Credit
you are a small employer, there is a tax credit that can put
money in your pocket.
The small business health care tax credit benefits employers
> offer coverage through the small business health options
program, also known as the SHOP marketplace
> have fewer than 25 full-time equivalent employees
> pay an average wage of less than $50,000 a year
> pay at least half of employee health insurance premiums
Here are five facts about this credit:
The maximum credit is 50 percent of premiums paid for small
business employers and 35 percent of premiums paid for small
To be eligible for the credit, you must pay premiums on behalf
of employees enrolled in a qualified health plan offered
through a Small Business Health Options Program Marketplace,
or qualify for an exception to this requirement.
The credit is available to eligible employers for two
consecutive taxable years beginning in 2014 or later. You may
be able to amend prior year tax returns to claim the credit
for tax years 2010 through 2013 in addition to claiming this
credit for those two consecutive years.
You can carry the credit back or forward to other tax years if
you do not owe tax during the year.
You may get both a credit and a deduction for employee premium
payments. Since the amount of your health insurance premium
payments will be more than the total credit, if you are
eligible, you can still claim a business expense deduction for
the premiums in excess of the credit. For more information,
see the small business health care tax credit page on IRS.gov.
For information about insurance plans offered through the SHOP
Marketplace, visit Healthcare.gov.
If you have comments or
questions on the information in these articles, as usual feel
free to call our offices at 801-521-4538.
Ray Clark, CPA, MBA