Child Care Tax Credit

							                                      2008 CHILD CARE CREDIT


In 2008, the child care credit is $1,000 for each qualifying child under the age of 17. A qualifying
child is an individual for whom the taxpayer can claim a dependency exemption and who is a son,
daughter, stepson, or stepdaughter (or descendant of either), a brother, sister, stepbrother, or
stepsister (or descendant of either) who the taxpayer cares for as the taxpayer's own child, or an
eligible foster child or the taxpayer. This credit is in addition to the child and dependent care credit
and is available whether or not the parents have any qualifying child care expenses or an employer
provided child care reimbursement account. The full credit is available in 2008 to single parents
with modified, adjusted gross incomes (AGIs) of $75,000 or less or to couples who file jointly with
AGIs of $110,000 or less ($55,000 for married individuals who file separately). The credit is phased
out for taxpayers whose AGIs exceed the limit at the rate of $50 of credit lost for every $1,000 of
AGI in excess of the limit.

The child care credit is available only for employment-related expenses for the care of children
age 12 and younger or disabled dependents. In addition, the credit applies to a maximum of
$3,000 of employment-related expenses for one child, $6,000 for two or more children. These
maximums are reduced by any amount excluded from gross income under an employer's qualified
dependent assistant program.

Adjusted                                                                                Two or More
Gross Income                              Credit %                One Child              Children

$15,000 and less                             35%                   $1,050                  $2,100

$15,001 to $17,000                           34%                   $1,020                  $2,040

$17,001 to $19,000                           33%                    $990                   $1,980

$19,001 to $21,000                           32%                    $960                   $1,920

$21,001 to $23,000                           31%                    $930                   $1,860

$23,001 to $25,000                           30%                    $900                   $1,800

$25,001 to $27,000                           29%                    $870                   $1,740

$27,001 to $29,000                           28%                    $840                   $1,680

$29,001 to $31,000                           27%                    $810                   $1,620

$31,001 to $33,000                           26%                    $780                   $1,560

$33,001 to $35,000                           25%                    $750                   $1,500

$35,001 to $37,000                           24%                    $720                   $1,440

$37,001 to $39,000                           23%                    $690                   $1,380

$39,001 to $41,000                           22%                    $660                   $1,320

$41,001 to $43,000                           21%                    $630                   $1,260

$43,001 and over                             20%                    $600                   $1,200