This credit is refundable, meaning the portion of the credit that is larger than your tax liability can be refunded to you.
To qualify, your adjusted gross income must be less than the limit set for your household size. See the
instructions for Schedule OR-WFHDC for those limits.
You must also have qualifying household services or dependent care expenses. Qualified expenses are paid by you (or your spouse, if filing jointly) for household services or care for qualifying individuals to allow:
- You (and your spouse, if filing jointly) to work or look for work.
- You to attend school, if you're single.
- You to work or look for work while your spouse attends school or is disabled, if your married filing jointly.
To qualify, expenses must be paid to a provider who isn't your spouse, the parent of your qualifying individual, or a person you can claim as a dependent.
You may pay qualified expenses with pretax dollars from an employee benefit plan.
You can't claim the credit if:
- Your income exceeds the threshold limitation for your household size. The limitations change each year; refer to Schedule OR-WFHDC on our website for more information.
- You don’t have earned income for the year.
- You’re filing as married filing separately, unless you meet an exception. See the instructions for Schedule OR-WFHDC for more information.
Who is a "qualifying individual"?
- A child under age 13 who you can claim as a dependent.
- Your disabled spouse who wasn't able to care for him or herself and lived with you for more than half the year.
- Any disabled person who wasn't able to care for him or herself who you can claim as a dependent or could claim as a dependent except they had a gross income of $4,300 or more; they filed a joint return; or you (or your spouse if filing jointly) could be claimed as a dependent on another taxpayer's return.
What are "household services" and "care of the qualifying individual"?
Household services are the services needed to care for the qualifying individual and to run the home. Costs for the care of the qualifying individual include the services for their well-being and protection. You can include the costs for care provided outside your home for your dependent under age 13 or any other qualifying individual who regularly spends at least eight hours a day in your home.
Qualifying household and dependent care expenses
- Public or private school (K-12).
- Summer school or tutoring.
- Overnight camps.
- Child support payments.
- Food, lodging, gas, or supplies.
- Late payment and most fees (see federal Publication 503 for more information).
For expenses for after-school activities and boarding school, only the portion that is for dependent care is eligible for this credit.
Qualifying expenses also don't include items paid by others on your behalf, such as expenses paid or reimbursed by a state social service agency, payments made by another family member, or payments made by the child's other parent.
What counts as proof of expenses?
You must be able to prove that you paid qualified expenses to claim this credit. Legible proof of both the payment and the receipt are required for each expense paid.
Note: The level of evidence we require increases when payments are made in cash or when the provider is a relative, friend, or someone you have a personal relationship with. If you make payments by check, it’s easier to prove that you paid the expenses claimed.
Proof of expenses include:
- Cancelled checks (front and back), or
- Money order or cashier's check stubs with corresponding bank statements showing the withdrawal, or
- Duplicate checks with corresponding bank statements showing the withdrawal, or
- Bank statements showing cash withdrawals,
- Signed receipts from the provider received at the time of payment.
- Electronic history report or statement showing money was sent by you, to whom it was sent and indicate what the payment was for.
Receipts should include:
- The qualifying individual's full name.
- Dates of care.
- Amount paid.
- Date paid.
- Name of person or agency paying.
- Provider's name, address, and phone number.
- Provider's tax identification number (SSN, ITIN, or FEIN).
- Method of payment (check, money order, cash, etc.)
We may also ask you to submit a statement from your care provider.
How to claim this credit
Schedule OR-WFHDC. You'll be asked to calculate the percentage of qualifying expenses you can claim. You must use the
WFHDC online calculator or Publication WFHDC-TB to find your percentage unless you use a tax preparation software that calculates it for you.
Include your schedule with your personal income tax return. You'll also need to claim the credit on your Schedule OR-ASC or Schedule OR-ASC-NP using code 895.
Penalty for falsely claiming the credit
You may be charged a penalty if you knowingly claim or knowingly assist someone else in claiming this credit falsely. The penalty is up to 25 percent of the amount claimed. Your credit will also be adjusted or denied.
If you assist someone in claiming this credit (such as during tax preparation), you should review their supporting documentation to verify that they're eligible for the credit. You should also ask clarifying questions to ensure they're not using false information. Please inform the taxpayer that a penalty may be assessed if they claim the credit and they know they aren't eligible for the credit or the amount of credit they're claiming.