25.7 Credit Allowed for Care of Qualifying Persons

To claim a credit for 2012, you must incur employment-related expenses (25.8) for at least one of the following qualifying persons who lives with you more than half the year:

1. A dependent under the age of 13 who is a “qualifying child” under 21.3. If you are divorced or separated, and you resided with the child for a longer time during the year than the other parent, you may be able to claim the credit even if the other parent is entitled to claim the child as a dependent (25.9).
2. Your spouse, if physically or mentally incapable of caring for him- or herself.
3. A dependent, regardless of age, who is physically or mentally incapable of caring for himself or herself. For example, he or she needs help to dress or to take care of personal hygiene or nutritional needs, or requires constant attention to avoid hurting him- or herself or others. Generally, you must be able to claim the person as a dependent, either as a qualifying child (21.3) or qualifying relative (21.4), but even if the person cannot be claimed as your qualifying relative because he or she has gross income of $3,800 or more for 2012, you may still claim a credit for his or her care costs. Also, if you cannot claim an exemption for the person because you (or your spouse if you file jointly) can be claimed as a dependent by another taxpayer, a credit can still be claimed for the person’s care costs.

EXAMPLE
You live with your mother, who is physically incapable of caring for herself. You hire a practical nurse to care for her in the home while you are at work. Payments to the nurse qualify as care costs. However, if you placed her in a nursing home, the cost of the nursing home would not qualify as a dependent care cost, but a medical expense deduction may be available (17.11).

If your child becomes age 13 during the year.

Take into account expenses incurred for his or her care prior to the 13th birthday. However, you do not prorate the $3,000 limitation. For example, if your child becomes age 13 on May 1, 2012, and you incurred $3,000 or more in care expenses between January 1 and April 30, the entire $3,000 qualifies for the 2012 credit.

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