John and Sally pay Janet (Sally's older sister) to watch John and Sally's child Dexter during the day. Janet cares for Dexter in her home. John and Sally may claim a child and dependent care credit based on the amount they pay Janet to care for Dexter.

Question

Quizplus · Accepted Answer

The child and dependent care credit can be claimed if the taxpayers pay someone to care for their child while they work, and the caregiver is not their spouse or dependent. Since Janet is Sally's sister, she is neither John nor Sally's spouse or dependent, and thus they can claim the credit based on the amount they pay her for caring for Dexter.

John and Sally Pay Janet (Sally's Older Sister) to Watch