Question about Child Care credit on Taxes?

I%26#039;ve been paying my 16 year old cousin to watch my son this year, and I write receipts up for this. Can I use this on my taxes as child care I paid for?

Question about Child Care credit on Taxes?

Yes, as long as your cousin is going to file the money paid as income. You will need his/her social security #.

Question about Child Care credit on Taxes?

Do you have earned income?

If so, then you should be ok, but get the IRS publication just to make sure.

I%26#039;ll get a link.

http://www.irs.gov/pub/irs-pdf/p503.pdf

Question about Child Care credit on Taxes?

If you do this, then your cousin needs to file taxes as a self-employeed individual. Your cousin would need to write you a year end statement detailing your expenses. As well, your cousin would owe as much as $721 in taxes. Since you are now declaring this tax credit, the IRS now knows that your cousin had this earned income. And yes, the IRS will go after your 16 year old cousin to collect on this money. Your cousin may never babysit for you again.

The other thing you have to consider is that the child care had to be done so that you could either work or go to school. If you hire a babysitter so you can go out with friends, then you are not allowed to claim that as childcare.