Child Related Expenses

Social security numbers for each family member.

If a child has not received a social security number, they will not qualify you for taking any child related tax credits.

Child Care Credit

This includes the childcare provider’s name, address, and social security number or EIN (Employer Identification Number) and the amount paid for each child. To qualify for Dependant Care Credit, the child needs to have been enrolled in after-school care while both parents either work or go to school. Also many summer camp programs and school fees for any education below the level of kindergarten qualifies.

Employer Reimbursement for Day Care

It takes some figuring to know whether a Flexible Spending Account for daycare is right for you. The FSA allows daycare expense to be treated as an adjustment from income tax. Your tax advisor can tell you whether it is better to use your daycare costs to help reduce your income tax, obtain a Dependent Care Credit, or both.

Income Received by Child.

It is important to know the exact amount of money your child earned during the year from working for an employer or as an independent contractor (such as babysitting or mowing lawns.) Even if they file a return, they generally will not claim themselves as an exemption. Unearned income is money received from a financial investment or interest-bearing account and the child may fall under the “kiddie tax” rules and need to pay tax on this income.

Educational Saving

Did you buy savings bonds or fund an education savings plan for your child’s college education? These investments have different rules relating to their taxability.

Divorce decree

If you are divorced and have child custody or tax-related issues regarding the children, you may be required to obtain the signature of the other parent or provide other proof of ability to claim the child for tax purposes.

Adoption expenses

If you have paid adoption expenses some of them may be deductible from other income. A detailed breakdown of the expenses and when the adoption was final will be needed.