Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Credit for Child and Dependent Care Expenses

Taxpayer Interview

Taxpayer Interview and Tax Law Application

Bill, 61, and Helen, 62, are married and have lived together for twenty years. Earlier in the interview with Bill, you learned that Helen, who is too sick to work, requires 24-hour-care. You wonder whether he can take the child and dependent care credit. Bill is claiming his granddaughter as a dependent, as noted in the Marital Status and Household Information section of his intake and interview sheet. She is 18 and takes care of herself.

This is how a volunteer would apply the questions from the Credit for Child and Dependent Care Expenses decision tree in the Volunteer Resource Guide, Nonrefundable Credits tab to find out whether Bill can take the credit.

Sample Interview
Volunteer says…   Bill responds…
 
For the credit for child and dependent care, I'd like to ask you some questions about the care provided for your wife, Helen. You may qualify for the credit. Oh, okay.
 
Why don't you tell me about your wife's illness and care? Well, she has chronic lung disease; she cannot take care of herself at all. We need to have someone in the home 24 hours a day.
 
I'm sorry she is so ill. That must be difficult for both of you.

[The volunteer, who determined earlier in the process that Bill has earned income from his full-time teaching job, skips the earned income test questions in the decision tree and moves ahead to the next relevant question.]
Yes, it is. Sometimes she has good days, and I'm thankful for that.
 
Did you pay someone to take care of your wife so that you could go to work? Yes, I pay my granddaughter, Lucy, who just graduated from high school, to take care of Helen.
 
Oh, I see. Well, unfortunately, you won't be able to take the credit for your wife because you are claiming Lucy as a dependent. Oh, that's okay. Thanks for looking into it for me.
 
You're welcome. Just trying to help!  
 
[Indicate that the taxpayer doesn't qualify for this credit (with the reason) on the intake and interview sheet.]

Bill does not pass the work-related expenses test because his expenses were paid to a dependent relative.