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More Iowans to Qualify for Child Care Tax Credit

April 28, 2014 11:13 am by: Category: Featured, Jobs & Economy, Recent News Leave a comment A+ / A-

In an effort to help middle class families, the House approved a tax credit to help Iowans offset the cost of child care.

The Iowa Child and Dependent Care Tax Credit is a refundable tax credit available to anyone that had child care expenses in the last year, such as paying someone to care for a child, earned income from wages, salaries, or similar compensation. The credit in Iowa is based on a taxpayer’s federal credit, which can be up to 35% of the qualifying care expenses. The total expenses are capped at $3,000 for one qualifying dependent or $6,000 for two or more.

Senate File 2337 makes changes to this state credit so tax filers could qualify for the full credit.

The House also voted to create an adoption tax credit. The credit would provide up to $2,500 to any Iowa taxpayer to help offset the costs of qualified adoption expenses. Under the bill, qualified adoption expenses includes welfare agency and legal fees, fees and costs relating to adopting the child, and medical and hospital expenses of the mother for birth of the adopted child. The credit is refundable or may be carried forward for one tax year.

4-28-14Childcare

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