If you're interested in hiring a domestic service worker to help you perform household tasks, you're in luck. These services may be eligible for a tax credit under the "dependent care credit" clause, commonly known as the "child care credit tax."
If you have children under the age of 13, the government can help compensate for your out-of-pocket child care expenses. Contrary to popular belief, this credit isn't limited to day care, nannies, or babysitters. Many parents don't know that the services of a housekeeper may also qualify for this tax break.
The child care credit is about 30 percent of the first $3,000 qualified expenses for one child, and about $6,000 if you have two or more children. Most moderate-to-high-income parents can take away about $1,200 annually in credit if they have two children—money that can be used toward the salary of a domestic service worker.
"You pay a housekeeper to care for your 9-year-old and 15-year-old children so you can work," cites BusinessManagementDaily.com, referring to a scenario spelled out by the IRS in its Child and Dependent Care Expenses publication. "You don't have to divide the expenses between the two children, even though the expenses are partly for the 15-year-old child who is not a qualifying person, because the expense is also partly for the care of your 9-year-old child, who is a qualifying person."
To find out if you qualify for this tax break, check out the publication. If you're looking for a qualified housekeeper, be sure to contact Colonial Domestic Agency.