Good morning,
The child and dependent care tax credit is a non refundable credit that will help to reduce your tax liability. It is worth apx 20% to 35% of total qualifying expenses paid for the care of dependent(s) while you (and your husband, if married filing joint) are both working and/or attending school full time.
This means that if you did not pay any money at all out of pocket for care, you will have no qualifying expenses required in order to claim the credit. Qualifying expenses may include payments to childcare centers, individuals or a combination.
If your work covered your childcare bill by providing you “daycare benefits” this amount will be reported on your W-2, and depending on your specifics may cause your tax liability (aka tax bill) to increase. However, your work may very well categorized offering free childcare to employees as more of a “fringe benefit”; regarding the free/discounted care you received as dependent care assistance, or discounted services sold by the business. In this case, the amounts for care would NOT be reported on your W-2 and are NOT taxable by Federal (meaning you would not be at risk of owing anything additional).
Hope this helps!
- Kourt
