Childcare element of tax credits des it come out of your child tax or do you get more money?

There are two ways to get the tax credit for childcare expenses. One is to use a Dependent Care Account that is funded through pre-tax dollars and you draw it down throughout the year.

The other is to claim expenses on your tax return that were NOT funded through pre-tax dollars. So if you set up $2,000 in a pre-tax account, and actually spent $3,000, you could apply the excess $1,000 to the tax credit worksheet and offset some of your tax that way.

The same expenditures are not used for both ways of funding.

Childcare element of tax credits des it come out of your child tax or do you get more money?

no it doesnt come out of your tax credits.

It is paid directly to whoever is looking after your child, or it is paid in the form of vouchers which you give to the carer

Childcare element of tax credits des it come out of your child tax or do you get more money?

Basically the Child Tax Credit and the Dependent Care/Expenses Credit are just that---credits to reduce the amount of your taxes that you owe. If yours is big enough, it may bring your tax liability down to zero. It will not give you a tax refund in itself--so NO, it won%26#039;t give you more money! But, the Additional Child Tax Credit will actually give you a refund if you qualify. Just fill out the worksheets and see.

Childcare element of tax credits des it come out of your child tax or do you get more money?

Assuming you are in the UK? Childcare credits are paid directly to you and you are then responsible for paying you nursery/childminder. They are separate from child tax and working tax credit and these should not be affected. I personally receive the childcare element for my 2 youngest children and i also run a nursery where we never receive payments directly from HM revenue and customs they just confirm with us if the child attends etc.