vom 2441

Department of the Treasury
Internal Revenue Service

Credit for Child and Dependent Care Expenses

> Attach to Form 1040.
DP See Instructions below.

OMB No. 1545-0068

1983

Name(s) as shown on Form 1040

Your social security number

1 Write the number of qualifying persons who were cared for in 1983. (See the instructions below for the definition of

qualifying persons.)

>

2 If payments listed on line 3 were s made to an individual, complete the following: Yes| No
a If you paid $50 or more in a calendar quarter to an individual, were the services performed in your home? :
bIf “Yes,” have you filed appropriate wage tax returns on wages for services in your home (see instructions for line 2
¢ If the answer to b is ‘‘Yes,”’ write your employer identification number. o>

3 Write the amount of expenses you incurred and actually paid in 1983, but do not write more than
$2,400 ($4,800 if you paid for the care of two or more persons) . 3

4 You must write your earned income on line 4. See the instructions for line 4 for the definition of earned
income.

e If you were unmarried at the end of 1983, write your earned income on line 4, OR
e If you are married, filing a joint return for 1983,
a write your earned income$__..........----.--- and
b write your spouse's earned income $ _........----------- ,and
© compare amounts on lines 4a and 4b, and write the smaller of the two amounts on linea... . . L4

5 Compare amounts on lines 3 and 4, and write the smaller of the two amounts on line 5. . 5

6 Write the percentage from the table below that t applies to the adjusted gross income on Form 1040,
line 33. . . soe ee 6

Ifline 33 percentage is: If line 33 is: Percentage is:
Over— But not Over— But not
over— over—
0-$10,000 30% (.30) $20,000-22,000 24% (.24)
$10,000-12,000 29% (.29) 22,000-24,000 23% (.23)
12,000-14,000 28% (.28) 24,000-26,000 22% (.22)
14,000-16,000 27% (.27) 26,000-28,000 21% (.21)
16,000-18,000 26% (.26) 28,000 20% (.20)
18,000-20,000 25% (.25)

7 Multiply the amount on line 5 by the percentage shown on line 6, and write the result. 7

8 Multiply any child and dependent care expenses for 1982 that you paid in 1983 by the percentage that
applies to the adjusted gross income on Form 1040, line 33, for 1982. Write the result. Gee line 8
instructions for the required statement.) . . at . ... 8

9 Add amounts on lines 7 and 8, and write the total . 9 |

10 a Write the tax shown on Form 1040, line40 . . 10a
b Add lines 41 through 44 of Form 1040, and write total. (see line. 10
instructions.) . sone woe 10b
¢ Subtract line 10b from line 10a, and write the result. (If ine 10b is more than line 10a, write zero.) | 10¢
11 Compare amounts on lines 9 and 10c, and write the smaller of the two amounts on line 11. Also, write
this amount on Form 1040, line 45 11

General Instructions

Paperwork Reduction Act Notice.—We
ask for this information to carry out the
Internal Revenue laws of the United States.
We need it to ensure that taxpayers are
complying with these laws and to allow us to
figure and collect the right amount of tax.
You are required to give us this information.

What Is the Child and Dependent Care
Expenses Credit?

You may be able to take a tax credit for
amounts you paid someone to care for your
child or other qualifying person so you could
work or look for work in 1983. The credit
will lower the amount of your tax. The credit
is based on a percentage of the amount you
paid during the year. The most you can take
asa credit is $720 if you paid for the care of

one qualifying pe person, or $1440 ify you paid

for the care of two or more qualifying

persons.

Who is a qualifying person.— A qualifying

person is any one of the following persons:

@ Any person under age 15 whom you claim
as a dependent (but see the special rule
below for Children of divorced or
separated parents).

© Your disabled spouse who is mentally or
physically unable to care for himself or
herself.

© Any disabled person who is mentally or
physically unable to care for himself or
herself and whom you claim as a
dependent, or could claim as a
dependent except that he or she had
income of $1,000 or more.

Children of divorced or separated

parents.—If you were divorced, legally
separated, or separated under a written
agreement, you may be able to claim the
credit even if your child is not your
dependent. Your child is a qualifying person
if all four of the following apply:

1. You had custody for the longer period
during the year, and

2. The child received over half of his or her
support from one or both of the parents,
and

3. The child was in the custody of one or
both of the parents over half of the year,
and

4. The child was under age 15, or was
physically or mentally unable to care for

himself or herself.
(Continued on back)

Form 2441 (1983)


Who Can Take the Credit?
To claim the credit alll five of the following
must apply:
1. You paid for the care so you (and your
spouse if you were married) could work or
look for work (but see the rules at the line 4
instructions for Spouse who is a full-time
student or is disabled).
2. One or more qualifying persons lived in
your home.
3. You (and your spouse if you were
married) paid over half the cost of keeping
up your home. The cost includes: rent;
mortgage interest; property taxes; utilities;
home repairs; and food eaten at home.
4. The person you paid to provide the care
was not your spouse or a person you could
claim as a dependent.
Note: /f the person you paid for the care
was your child, he or she must have been
19 or over by the end of 1983.
5. If you were married at the end of 1983,
generally, you must file a joint tax return.
However, there are two exceptions to this
tule. You will be treated as unmarried and
can file a separate return and still be eligible
to take the credit if:

a. You were legally separated; or

b. You were living apart, and:

@ The qualifying person lived in your
home over 6 months, and
© You provided over half the cost of
keeping up your home, and
© Your spouse did not live in your
home during the fast 6 months of
the tax year.
What Are Qualified Expenses?
Qualified expenses include amounts paid
for household services and care of the
qualifying person.

Household services.—These services
must be needed to care for the qualifying
person as well as to run the home. They
include, for example, the services of a cook,
maid, babysitter, housekeeper, governess,
or cleaning person if the services were at
least partly for the benefit of the qualifying
person.

Care of the qualifying person.—Care
includes the cost of services for the
qualifying person’s well-being and
protection.

Generally, care does not include food,
clothing, or schooling expenses; but if you
paid for care that included these items, and
you cannot separate their cost from the
total payment, you can count the total
payment. However, you cannot count the
cost of schooling for a child in the first grade
or above.

Care outside the home.—You can count
care provided outside your home if the care
was for:

a. Your dependent under age 15; or

b. Any other qualifying person who

regularly spends at least 8 hours each
day in your home.

Care that is provided by a dependent care
center may be counted if the center
complies with all applicable state and local
laws and regulations. A dependent care
center is a place that provides care for at
least seven persons (other than persons.
who live there), and receives a fee,
payment, or grant for providing the services
for any of those persons, regardless of
whether the center is run for profit.

Medical expenses.—Some dependent
care expenses may qualify as medical
expenses. If you itemize deductions, you
may want to take all or part of these
medical expenses on Schedule A (Form
1040). If you cannot use all the medical
expenses on Form 2441 because of the
dollar limit or earned income limit
(explained later), you can take the rest of
these expenses on Schedule A. But if you
deduct the medical expenses first on
Schedule A, you cannot use any part of
these expenses on Form 2441.

For more information, get Publication
503, Child and Disabled Dependent Care.

Specific Instructions

We have provided specific instructions for
most of the lines on the form. Those lines
that do not appear in the instructions are
self-explanatory.

Line 2.—In general, if you paid cash wages
of $50 or more in a calendar quarter for
household services provided by a person
such as a housekeeper, maid, babysitter, or
cook, you must file an employment tax
return. If you are not sure whether you
should file an employment tax return, get
Form 942, Employer's Quarterly Tax
Return for Household Employees.

Note: You should file a Form 940,
Employer's Annual Federal Unemployment
Tax Return, for 1983 by January 31, 1984,
if you paid cash wages of $1,000 or more
for household services in any calendar
quarter in 1982 or 1983.

Line 3. Dollar limit.—On line 3 write the
amount of qualified child and dependent
care expenses you incurred and actually
paid in 1983. However, the most you can
figure the credit on is $2,400 a year for one
qualifying person, or $4,800 a year for two
or more qualifying persons.

Note: Do not include on line 3 qualified
expenses that you incurred in 1983 but did
not pay until 1984. Instead, you may be
entitled to increase the amount of your
1984 credit when you pay the 1983
expenses in 1984.

Line 4. Earned income limit.—Figure your
earned income on line 4. The amount of
your qualified expenses cannot be more
than your earned income.

In general, earned income is wages,
salaries, tips, and other employee
compensation. It also includes net earnings
from self-employment. For more
information on what is earned income for
purposes of the credit, see Publication 503.

Unmarried taxpayers.—|f you were
unmarried at the end of 1983 or are treated
as being unmarried at the end of the year,
write your earned income on line 4.
Married taxpayers.—If you are married,
filing a joint return, figure each spouse’s
earned income separately and disregard
community property laws. Write your
earned income on line 4a and your spouse’s
earned income on line 4b. Then, write the
smaller of your earned income or your
spouse’s earned income on line 4.

Spouse who is a full-time student or is
disabled.—If your spouse was a full-time
student or was mentally or physically unable
to care for himself or herself, figure your
spouse's earned income on a monthly basis
to determine your spouse's earned income
for the year. For each month that your
spouse was disabled or a full-time student,
your spouse is considered to have earned
income of not less than $200 a month
($400 a month if more than one qualifying
person was cared for in 1983).

{f, in the same month, both you and your
spouse were full-time students and did not
work, you cannot use any amount paid that
month to figure the credit. The same
applies to a couple who did not work
because neither was capable of self-care.

A full-time student is one who was
enrolled in a school for the number of hours
or classes that is considered full time. The
student must have been enrolled at least 5
months during 1983.

Self-employment income.—You must
reduce your earned income by any loss from
self-employment. If your net earnings from
self-employment are less than $1,600, and
you use the optional method to figure your
self-employment tax, you may be able to
increase your net earnings to $1,600. See
Publication 533, Self-Employment Tax, for
details. If you only have a loss from self-
employment, or your loss is more than your
other earned income and you do not use the
optional method, you cannot take the credit.

Line 8.—If you had qualified expenses for
1982 that you did not pay until 1983, you
may be able to increase the amount of
credit you can take in 1983. To do this,
multiply the 1982 expenses you paid in
1983 by the percentage from the table on
line 6 that applies to the adjusted gross
income shown on your 1982 Form 1040,
line 33. Your 1982 expenses must be within
the 1982 limits. Attach a computation
showing how you figured the increase. (Use
the example in Publication 503 as a guide.)

Line 10.—Your credit cannot be more than
your tax after subtracting certain credits.
Write on line 10a your tax from Form 1040,
line 40. Add the amounts, if any, from lines
41 through 44 of Form 1040, and write the
total on line 10b. Also, add any WIN credit
carryover you entered on Form 1040, line
46. Subtract line 10b from line 10a, and
write the result on line 10c.

Line 11.—Compare amounts on lines 9
and 10c, and write the smaller of the two
amounts on line 11. Also write this amount
on Form 1040, line 45. This is your credit
for child and dependent care expenses.