Can I Claim Babysitting on My Taxes for Deductions?

Qualifying Child

You can claim the cost of babysitting if your child falls within the Internal Revenue Service's guidelines for the Child and Dependent Care Credit. All children must be U.S. citizens, nationals or resident aliens. The child needs to be a qualifying relative, which the IRS defines as a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendent of any of these who lived with you for more than half of the tax year and is claimed as a dependent on your return. The child also must be under the age of 13 when he received care, unless there is a mental or physical disability that prevents the child from being left unattended.

To claim the Child and Dependent Care Tax Credit, you must use the babysitting service so that you can work at a job where you earn taxable income. You can also claim the credit if you use babysitting to look for a job or attend school. Sometimes employers provide benefits for employees who have dependent care expenses, but this does not disqualify you from claiming the credit. Instead, the amount you can claim will be decreased by any amount your employer pays for dependent care benefits.

Almost any caregiver you pay to watch your child can count towards this credit. The only exceptions are those you or your spouse can claim as a dependent. Also, you cannot claim a credit for payment made to your own child who is under the age of 19, even if you are not claiming that child as a dependent. You cannot pay your spouse or your child's parent to watch your child and claim the credit. If the babysitter is your own adult child who you cannot claim as a dependent, you can claim the credit.

To claim the Child and Dependent Care Credit, you will need the taxpayer identification number of the caregiver. If the babysitter is an individual this is her Social Security number. If the child goes to a daycare center, then you will need the employer identification number. Form W-10 can be used to collect this information. To claim the credit, complete Form 2441 with your Form 1040, and you cannot file Form 1040EZ when claiming the credit.