Credit for Child and Dependent Care Expenses
If you are entitled to claim an income tax credit for child and dependent care expenses on
your federal return, you may also claim a tax credit for these expenses on your
North Carolina return. The credit will either increase your refund or decrease
the tax you owe.
The amount of your credit depends on the age of your dependents,
your filing status, the amount
of your federal adjusted gross income, and whether your dependents
were physically or mentally incapable of caring for themselves. For the tax years 2003, 2004, and 2005, the maximum employment related expenses on which the credit is based is $2,400 for one dependent and $4,800 for two or more dependents. For tax years beginning on or after January 1, 2006, the maximum expenses on which the credit is based is equal to the amounts for federal purposes - $3,000 for one qualifying dependent and $6,000 for two or more qualifying dependents. Note: Child support payments do not qualify as child and dependent care expenses.
To determine the amount of your credit on your state return, you
parts 2 and 4 of Form D-400TC. Please refer to the Child and Dependent
Care Credit Table on page 17 of the instructions for the percentage
to use in determining your credit. Then enter your credit amount
on line 19 of Form D-400. Your tax credit cannot exceed your North
Carolina income tax.
If you are a nonresident or part-year resident, you must
multiply the credit by the decimal amount shown on line 16 of Form
D-400. Under certain circumstances, the decimal amount on line 16
can exceed one hundred percent. In these cases, the credit is limited
to the amount on line 13 of Form D-400TC.
Be sure to include Form D-400TC (tax credit schedule) when filing your
Last modified on:
01/03/13 03:39:47 PM.