Content Working Family Household and Dependent Care Credit information Reporting on Your Tax Return Adult Daycare Dependent Care FSA To be work related, your expenses must allow you to work or look for work. If you are married, generally both you and your spouse must work or look for work. One spouse is treated as working during any month he or she is a full-time student or isn’t physically or mentally able to care for himself or herself. This rule applies to only one spouse for any 1 month. The Internal Revenue Service annual contribution limit is $5,000. However, reimbursement is limited to the lesser of your earned income for the year or the cost of care, up to $5,000. Working Family Household and Dependent Care Credit information This is because his dollar limit is reduced as shown next. Although the dollar limit for his work-related expenses is $8,000 , George figures his credit on only $7,000 of the $7,900 work-related expenses he paid. She isn’t separated under a decree of divorce or separate maintenance agreement and uses the married filing separate filing status. Amy maintains a home for herself and Sam, her disabled brother. Sam is permanently and totally disabled and unable to care for himself. Your employer can tell you whether your benefit plan qualifies. To claim the exclusion, you must complete Part III of Form 2441. Amounts excluded from your income under your employer’s dependent care benefits plan can’t be used to claim a medical expense deduction. If you use these expenses to figure the credit and they are more than the earned income limit or the dollar limit, discussed later, you can add the excess to your medical expenses. However, if you use your total expenses to figure your medical expense deduction, you can’t use any part of them to figure your credit. Some expenses for the care of qualifying persons who aren’t able to care for themselves may qualify as work-related expenses and also as medical expenses. Reporting on Your Tax Return Generally, married couples must file a joint return to take the credit. However, […]