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If you or your spouse are going back to school, you might have to pay someone to watch the kids.

Nail down the dependent care credit. This credit can offset your tax bill on a dollar-for-dollar basis.  Although the dependent care credit is generally available only if both spouses work, it is also allowed if one spouse works while the other goes to school full-time.  The dependent care credit can be claimed for the costs of caring for children under age 13. The credit in 2022 for most moderate-to-high income taxpayers is equal to 20% of the first $3,000 of qualified expenses for one child or up to the first $6,000 of qualified expenses for two or more eligible children.  Qualified expenses can’t exceed your earned income (if single) or the earned income of the lower-earning spouse if you are married. So you typically can pocket a maximum credit of $600 for one eligible child or $1,200 for two or more eligible children.  To qualify for the credit, both spouses must be “gainfully employed.” Under the tax law definition, a couple still qualifies if one spouse works full-time and the other is a full-time student.  Note that a spouse who is a full-time student is treated as having earned income. The earned income for each month is considered to be at least $250 if there’s at least one qualified person in your home or at least $500 if there are two or more.  Finally, for these purposes, the IRS says that the term “school” includes high schools, colleges, universities and technical, trade and mechanical schools.[/vc_column_text][us_image image=”3485″][/vc_column][/vc_row]