I pay for child care in a non-direct way and due to this situation I would like to know if I can and how I can properly claim the Dependent Care Tax Credit. Here is my situation: there is an in-law unit in the back of the property I live in. My brother lives in the in-law. We have charged previous tenants of the in-law $1125 per month. When my brother moved in, we made an arrangement that if he could babysit regularly, then I would cover his rent. So I have never made an actual payment to my brother for his babysitting, I have simply paid his portion of the rent, but this $1125 expense of mine is effectively for child care. So can I claim this expense for the Dependent Care Tax Credit since I never made direct payments to my brother? Will it just need to require my brother including this babysitting “income” when he files his taxes?
