Qualifying for Child and Dependent Care Credit for Private Preschool and Pre-K Expenses

Yes, preschool and Pre-K expenses generally qualify for the Child and Dependent Care Credit! Since both you and your spouse worked, you meet the earned income requirement. The IRS considers care for children under 13 that allows you to work or look for work as qualifying expenses. The educational component doesn't disqualify it - preschool and Pre-K programs are primarily for care at those ages, even at private schools. Just keep in mind there's a cap on how much you can claim - $3,000 for one child or $6,000 for two or more children. The credit percentage depends on your adjusted gross income, ranging from 20% to 35%. Make sure you get the provider's tax ID number and complete Form 2441 with your tax return. You'll need information about your care provider, including their name, address, and tax identification number.

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One thing to watch out for with the Child and Dependent Care Credit - if your employer offers a dependent care FSA and you used it, you need to subtract that amount from your eligible expenses! I made this mistake last year and almost double-dipped. You can't claim the same expenses for both the FSA and the tax credit. For example, if you contributed $5,000 to a dependent care FSA and had $8,000 in qualifying pre-k expenses for two kids, you can only apply $3,000 of those expenses toward the Child and Dependent Care Credit (since the max for two kids is $6,000).

Does anyone know if half-day preschool programs qualify for the Child and Dependent Care Credit? My daughter only goes to preschool from 8-12, but I work full time. We have a babysitter in the afternoons. Can I claim both?

Great question about private preschool and Pre-K expenses! You're definitely on the right track. Since both you and your spouse worked full-time, those expenses should qualify for the Child and Dependent Care Credit. The IRS treats preschool and Pre-K as qualifying care for children under 13, even when provided by private schools. However, keep in mind that with two children, you can only claim up to $6,000 in expenses (not the full $14,800 you paid). The credit percentage depends on your adjusted gross income - it ranges from 20% to 35% of your qualifying expenses. So you could potentially get a credit of $1,200 to $2,100. Make sure to collect the school's name, address, and tax ID number (EIN) for Form 2441. You'll need this information when you file. Also, if either of you contributed to a dependent care FSA through work, you'll need to subtract that amount from your eligible expenses to avoid double-dipping on tax benefits.