Tax season is upon us, and for Minnesota residents, there’s potentially good news on the horizon. If you’re filing your 2023 tax return, you might just qualify for a valuable rebate through the Child and Dependent Care Credit program. In this article, we’ll dive into the details of this program, eligibility criteria, and how you can make the most of it to boost your savings.
The Child and Dependent Care Credit is designed to alleviate the financial burden of care expenses for eligible recipients. This is a refundable tax allotment, meaning that even if you don’t owe income tax, you could still receive a refund. This is excellent news for Minnesota residents looking to ease their childcare or dependent care costs.
Minnesota Child and Dependent Care Credit Tax Program
As with any tax credit, there are some income thresholds to keep in mind. The credit begins to phase out if your federal adjusted gross income surpasses $55,300. However, don’t let this deter you just yet; there are still plenty of opportunities to qualify.
To be eligible for the Child and Dependent Care Credit in Minnesota, you (or your spouse, if filing jointly) must have earned income. Additionally, you need to provide documentation that supports the expenses incurred for either childcare, care for a qualifying person, or household services.
Several additional factors are considered when assessing eligibility for this particular child tax credit. Firstly, your filing status cannot be “married filing separately.” Secondly, the qualifying individual must have resided with you for a majority of the year.
Finally, there are income limits in place, where your 2022 federal adjusted gross income should not exceed $67,300 if you have one qualifying person or $79,300 if you have two or more qualifying persons. These criteria are crucial in determining whether one qualifies for the specific benefit or program.
Who is a “Qualifying Person”?
The Internal Revenue Service (IRS) defines a “qualifying person” for this child tax credit as a dependent under the age of 13, a spouse who is physically or mentally incapable of self-care, a person who, due to physical or mental limitations, cannot care for themselves.
The amount of credit you can receive depends on your specific circumstances. Here’s a breakdown to understand this better:
- If you have one qualifying dependent and your federal adjusted gross income is less than $55,300, you could receive a maximum credit of $1,050.
- If you have two qualifying dependents and a federal AGI under $55,300, your maximum credit increases to $2,100.
- For those with one qualifying dependent and a federal AGI between $55,300 and $67,300, you can receive a maximum credit of $600, minus 5% of your federal AGI exceeding $55,300. Unfortunately, if your federal AGI exceeds $67,300, you won’t qualify for this credit.Eligible taxpayers can claim them when filing their 2023 income tax returns. Remember that the deadline for filing these returns is April 15, 2024, so mark your calendars and ensure you don’t miss out on this opportunity to ease your financial burden.