Form 2441

Form 2441

A form that one files with the IRS to claim a tax credit for expenses incurred for child care. A parent may file Form 2441, for example, if the parent paid a daycare service or a nanny to babysit while the parent was at work.
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The credit is claimed on Form 2441. On line 2(b), the form asks the taxpayer to enter the qualifying person's Social Security number; however, the instructions inform the taxpayer to use an ITIN or ATIN (adoption taxpayer identification number) if the qualifying person cannot get a Social Security number.
On Form 2441, line 2(b), Wesley and Marie will insert Yves' ITIN.
With form 1040A, claim the credit on Schedule 2, and on Form 2441 with Form 1040.
Finally, dependent care expenses must be recalculated as if a joint Federal Form 2441, Child and Dependent Care Expenses, had been filed, because the deduction for dependent care expenses is calculated based on Federal earned income.
Thus, the taxpayer who wishes to list on form 2441 the child care expenses for a child under age one can still take the EIC provided for in IRC section 32(b)(2) but cannot take the additional credit for a child born in 1991.
Presumably, the taxpayer could list the child care expenses of one child on form 2441 and still use the EIC amount for the other child under age one at December 31, 1991.
The credit, which is a dollar for dollar reduction in the taxpayer's federal income tax liability, is claimed on Form 2441 - Credit for Child and Dependent Care Expenses.
The authors, however, point to a case which demonstrates that the perceived downside of paying the employment tax might be significantly offset through options such as an employer-sponsored flexible spending account or a Form 2441 credit.
(See IRS Form 2441 for credit amount breakdowns.) Take the one that gives you the biggest bang for your buck.
Form 1040 filers claim the credit or exclusion on Form 2441; Form 1040A filers use Schedule 2.