Publication 503 - Child And Dependent Care Expenses - 2002
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22Contents
Department of the Treasury
Internal Revenue Service
Important Change for 2002 . . . . . . . . . . . . . . . . . . .
1
Important Changes for 2003 . . . . . . . . . . . . . . . . . .
1
Publication 503
Important Reminders . . . . . . . . . . . . . . . . . . . . . . .
2
Cat. No. 15004M
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Child and
Tests To Claim the Credit . . . . . . . . . . . . . . . . . . . .
2
Qualifying Person Test . . . . . . . . . . . . . . . . . . . .
4
Dependent
Keeping Up a Home Test . . . . . . . . . . . . . . . . . .
6
Earned Income Test . . . . . . . . . . . . . . . . . . . . . .
6
Work-Related Expense Test . . . . . . . . . . . . . . . .
7
Care Expenses
Joint Return Test . . . . . . . . . . . . . . . . . . . . . . . .
9
Provider Identification Test . . . . . . . . . . . . . . . . .
9
How To Figure the Credit . . . . . . . . . . . . . . . . . . . . 10
Figuring Total Work-Related Expenses . . . . . . . . 10
For use in preparing
Earned Income Limit . . . . . . . . . . . . . . . . . . . . . . 11
Dollar Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2002
Returns
Amount of Credit . . . . . . . . . . . . . . . . . . . . . . . . 13
How To Claim the Credit . . . . . . . . . . . . . . . . . . . . 14
Employment Taxes for Household
Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . . 19
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Important Change for 2002
New definition of earned income. Earned income no
longer includes employee compensation that is nontax-
able. See Earned Income Test.
Important Changes for 2003
Beginning in 2003, the following changes will be made to
the child and dependent care credit.
Credit percentage. The credit can be as much as 35%
(increased from 30% in 2002) of your qualified expenses.
Income that qualifies for highest percentage. The
maximum adjusted gross income amount that qualifies for
the highest percentage (35% in 2003) will increase to
$15,000.
Dollar limit. The dollar limit on the amount of qualifying
expenses will increase to $3,000 for one qualifying individ-
ual and $6,000 for two or more qualifying individuals.
Earned income amount for nonworking spouse. The
amount of earned income your spouse who is either a
full-time student or not able to care for himself or herself is
treated as having earned will increase. This amount will
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