Federal Income Credit For Child And Dependent Care Expenses: Fill & Download for Free

Or maybe the problem is that you failed to read the instructions, and thus did not realize that you can claim personal exemptions, take the deduction for child care expenses, and even claim the child tax credit (CTC) or the additional child tax credit (ACTC), with regard to your your foreign born children on your US taxes, as long as they reside with you in the United States. All you have to do is obtain an ITIN for each such child prior to the due date of the return (and if you claim the CTC or ACTC, complete Part I of Schedule 8812 and attach that schedule to your return). The only tax credit that you cannot claim with respect to a foreign born child who is neither a citizen nor a lawful permanent resident is the earned income tax credit.Presumably, you have not yet obtained ITINs for your US resident children, and so you will not be able to amend your past year returns to claim the CTC or ACTC for your children. However, you can probably still obtain ITINs for them now and amend your returns (up to three years back) to at least include them as dependents, claim them as deductions, and get a refund of your overpayment. You may wish to consult with a tax attorney or other tax professional, since the process for amending a previously filed tax return is complicated.Of course, you are free to disregard the instructions and file a tax return in which you fail to claim deductions to which you are entitled, and then go on the Internet and launch ill-informed rants at the United States for being insensitive to your needs. The First Amendment guarantees you this freedom.Topic 857 Individual Taxpayer Identification Number (ITIN)Publication 17 (2016), Your Federal Income TaxPublication 503 (2016), Child and Dependent Care Expenses

It’s not really.Direct comparisons of taxation between countries are surprisingly difficult, because things like Tax Credits are based on individual circumstances such as your marital status, and number of children, etc. Countries use taxation to fund all sorts of different things.But let’s try to compare to the US. The number of times I have had to edit this answer reinforces to me just how complicated comparing taxes can be!**Let’s take Jane. She is 35, divorced, with three children and works full-time (39 hours per week) in Manchester, earning the Manchester average £27,200 per year[1][1][1][1]. Two of her kids are school age and use after-school club, and one is in full-time daycare; she spends £200 per week on childcare in total. Neither she, nor any of her children are disabled, and she has no other income, claims no other benefits or any other tax deductibles.Based on her income, she owes £60 per week in Income Tax and £44 in National Insurance[2][2][2][2]. But… She qualifies for £171 per week Child Tax Credit and £68 per week Working Tax Credit[3][3][3][3]. She will also get £47 per week in Child Benefit[4][4][4][4]. This completely nets-off her Tax burden and most of the cost of her childcare. She ends up spending £18 per week on childcare out-of-pocket, but effectively pays nothing in tax (technically she's taxed at source, but the credits can be paid into her bank account on payday). Being a British citizen, she also gets full coverage, free-at-the-point-of-use healthcare for her and her children. Jane also gets 28 days mandatory paid holiday per year[5][5][5][5] (equivalent to £2,800) on top of 8 public holidays, statutory sick pay and statutory maternity pay.**Now let’s compare to the US. Harry is 35, a divorced, single father of three in Tennessee. He earns $35,000 per year (below the US average, but directly comparable to Jane’s wage based on current exchange rates). He is working 39 hours per week, and like Jane, spends around $200 per week on child care.As head of the household, per week Harry owes $41 in Federal Tax, $65 in Social Security[6][6][6][6]. His total tax burden is $106 per week. Harry can claim back Earned Income Credit of around $15 per week[7][7][7][7], and he can also claim back Child Tax Credit of $57 per week. These reduce his (already low) Federal Income Tax burden down to zero. BUT... not his FICA taxes ($52 per week). He can claim the Additional Child Tax Credit though. This works out around $58; which should counterbalance his FICA payment with $6 left for him.He can claim back some of the cost of the child care via the Child and Dependent Care Credit on his IRS filing[8][8][8][8]. At the salary he is earning, it would be roughly 25% of the total cost… so around $50 per week. So that means he’s paying roughly $150 per week childcare.In total, factoring in tax and the cost of childcare, Jane is roughly $130 better off per week.But it's not all about the money. For Harry to receive the same holiday and sick pay entitlements as Jane would require him to have a very generous contract. In reality, if he’s following the national average, he’ll get between 7 and 9 paid holiday days per year[9][9][9][9](equivalent to approximately $1,200 per year). We also have to assume that his employer offers Health Insurance. If they do, he will need to pay a contribution towards the premium, which based on the Tennessee average, would be a contribution of around $23 per week[10][10][10][10]. If they don’t offer it, he’d have to sort his own out, at tremendous expense.**So this shows that simply looking at Income Tax in isolation is disingenuous. Countries, States and Cities all use Tax for myriad reasons, and in Europe, Tax is also used as a means of providing Universal healthcare. Based on these two comparable examples, it’s hard to argue that Jane is not “better off”.Of course, I accept you’ll probably be able to find case studies which prove the opposite, particularly once you get into the high-earner brackets. But comparing apples-and-apples is surprisingly hard.**Note, that I’ve excluded things like Council Tax (UK), City Tax and other municipal taxes (US). I’ve also excluded pensions and 401K. The cost of living is not taken into account either, e.g. the cost of household utility bills, food, etc. Travelling to and from work is excluded but could be a big contributing factor to the total household budget.Footnotes[1] Average Salary UK | Average Wage UK[1] Average Salary UK | Average Wage UK[1] Average Salary UK | Average Wage UK[1] Average Salary UK | Average Wage UK[2] Income tax calculator: Find out your take-home pay[2] Income tax calculator: Find out your take-home pay[2] Income tax calculator: Find out your take-home pay[2] Income tax calculator: Find out your take-home pay[3] https://www.tax.service.gov.uk/tax-credits-calculator[3] https://www.tax.service.gov.uk/tax-credits-calculator[3] https://www.tax.service.gov.uk/tax-credits-calculator[3] https://www.tax.service.gov.uk/tax-credits-calculator[4] Child Benefit tax calculator[4] Child Benefit tax calculator[4] Child Benefit tax calculator[4] Child Benefit tax calculator[5] Holiday entitlement[5] Holiday entitlement[5] Holiday entitlement[5] Holiday entitlement[6] United States (US) Salary Tax Calculator[6] United States (US) Salary Tax Calculator[6] United States (US) Salary Tax Calculator[6] United States (US) Salary Tax Calculator[7] Earned Income Tax Credit Estimator for Tax Year 2017[7] Earned Income Tax Credit Estimator for Tax Year 2017[7] Earned Income Tax Credit Estimator for Tax Year 2017[7] Earned Income Tax Credit Estimator for Tax Year 2017[8] Can I Claim the Child & Dependent Care Tax Credit?[8] Can I Claim the Child & Dependent Care Tax Credit?[8] Can I Claim the Child & Dependent Care Tax Credit?[8] Can I Claim the Child & Dependent Care Tax Credit?[9] What's a Typical Paid Holiday Schedule in the US?[9] What's a Typical Paid Holiday Schedule in the US?[9] What's a Typical Paid Holiday Schedule in the US?[9] What's a Typical Paid Holiday Schedule in the US?[10] Average Single Premium per Enrolled Employee For Employer-Based Health Insurance[10] Average Single Premium per Enrolled Employee For Employer-Based Health Insurance[10] Average Single Premium per Enrolled Employee For Employer-Based Health Insurance[10] Average Single Premium per Enrolled Employee For Employer-Based Health Insurance

If you paid someone to care for a child or a dependent so you could work, you may be able to reduce your federal income tax by claiming the Credit for Child and Dependent Care expenses on your tax return. This Credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13. The Credit is also available if you paid for the care of a spouse or a dependent of any age who is physically or mentally incapable of self-care.See https://www.irs.gov/pub/irs-pdf/p501.pdf for guidance.