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Department of Revenue: Newsroom

Tax credit could ease burden of paying child care
02/20/2009
SALEM—Oregon's Working Family Child Care (WFC) tax credit may help low-income families recoup some of their child care costs.

"This credit is especially important to low-income families because it's refundable," said Shannon Ball, Oregon Department of Revenue's WFC coordinator.

A refundable credit means that if the credit is more than the tax you owe, the state will pay you the difference.

"A family that qualifies for the credit could get some money back from the state even if they don't owe taxes," Ball said.

You may qualify for the credit if:
  • You paid qualifying child care expenses to allow you (and your spouse or registered domestic partner) to work or attend school, and
  • You had at least $7,500 of earned income, and
  • You had less than $2,951 in investment income (such as interest, dividends, or capital gains), and
  • Your income was less than the limits for your household size.

You must be able to prove you made the payments for the child care. Ball suggests keeping proof-of-payment records for at least three years from the date you file your return.

"We may ask for proof at any time. If you do not have proof of your expenses, we may deny your credit," she said.
 
If you paid by check, proof may include:
  • Front and back copies of canceled checks, or
  • Check carbons along with bank statements.

If you paid by money order, proof may include:
  • Money order stubs, and
  • Signed receipts provided by the child care provider each time you made a payment, and
  • A detailed year-end payment summary issued by the child care provider, along with bank statements showing your cash withdrawals used to pay for childcare.

If you paid in cash, proof may include:
  • Bank statements or bank receipts showing cash withdrawals for paying child care.
  • Signed receipts provided by the child care provider each time you made a payment, and
  • A detailed year-end payment summary issued by the child care provider, along with bank statements showing your cash withdrawals you made to pay for child care.

 "I can't stress enough how important keeping good records is for this credit," Ball said.

For more information on WFC, Oregon income taxes, and tax forms and instructions, visit www.oregon.gov/DOR/PERTAX, or call 1-800-356-4222 toll-free from an Oregon prefix (English or Spanish), or 503-378-4988 in Salem. For TTY (hearing or speech impaired), call 1-800-886-7204; Salem, 503-945-8617. Because of the volume of calls the department receives during tax season, callers may experience extended waiting times.
 
 
Page updated: February 20, 2009

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