Instructions For Schedule 2 (Form 1040a) - 2007
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4Department of the Treasury
Internal Revenue Service
2007 Instructions for Schedule 2 (Form 1040A)
If you paid someone to care for your child or other qualifying person so you (and your
Child and
spouse if filing a joint return) could work or look for work in 2007, you may be able to take
the credit for child and dependent care expenses. You (and your spouse if filing a joint
Dependent Care
return) must have earned income to take the credit. (See the instructions for line 5.) If you
can take the credit, use Schedule 2 to figure the amount of your credit.
If you (or your spouse if filing a joint return) received any dependent care benefits for
Expenses for
2007, you must use Schedule 2 to figure the amount, if any, of the benefits you may exclude
from your income on Form 1040A, line 7. You must complete Part III of Schedule 2 before
Form 1040A
you can figure the credit, if any, in Part II.
Additional information.
See Pub. 503 for more details.
Filers
To find out who is a qualifying child and who is a dependent, see
What’s New
Pub. 501, Exemptions, Standard Deduction, and Filing Information.
New definition of earned income.
When you figure your credit for
To be a qualifying person, the person must have lived
child and dependent care expenses, your earned income no longer
with you for more than half of 2007.
includes employee compensation that is nontaxable. However, you
can elect to include any nontaxable combat pay in earned income to
figure the credit.
Special rule for children of divorced or separated parents.
Even if you cannot claim your child as a dependent, he or she is
Part-time work and temporary absences from work.
You may be
treated as your qualifying person if:
able to figure your credit using expenses for care while you were
•
temporarily absent from work or working part-time.
The child was under age 13 or was physically or mentally not
able to care for himself or herself, and
•
You were the child’s custodial parent (the parent with whom
Definitions
the child lived for the greater part of 2007).
The noncustodial parent cannot treat the child as a qualifying
Dependent care benefits
person even if that parent is entitled to claim the child as a depen-
Dependent care benefits include:
dent under the special rules for a child of divorced or separated
•
parents.
Amounts your employer paid directly to either you or your
care provider for the care of your qualifying person(s) while you
These include amounts paid for household
Qualified expenses.
worked,
services and care of the qualifying person while you worked or
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The fair market value of care in a daycare facility provided or
looked for work. Child support payments are not qualified ex-
sponsored by your employer, and
penses. Also, expenses reimbursed by a state social service agency
•
are not qualified expenses unless you included the reimbursement
Pre-tax contributions you made under a dependent care flexi-
in your income.
ble spending arrangement (FSA).
Generally, if you worked or actively looked for work during
Your salary may have been reduced to pay for these benefits. If
only a part of the period in which you incurred the expenses, you
you received dependent care benefits as an employee, they should
must figure your expenses for each day. However, there are special
be shown in box 10 of your 2007 Form(s) W-2.
rules for temporary absences or part-time work. See Pub. 503 for
details.
A qualifying person is:
Qualifying person(s).
Household services. These are services needed to care for the
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A qualifying child under age 13 whom you can claim as a
qualifying person as well as to run the home. They include, for
dependent. If the child turned 13 during the year, the child is a
example, the services of a cook, maid, babysitter, housekeeper, or
qualifying person for the part of the year he or she was under age
cleaning person if the services were partly for the care of the quali-
13.
fying person. Do not include services of a chauffeur or gardener.
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Your disabled spouse who is not physically or mentally able to
You can also include your share of the employment taxes paid
care for himself or herself.
on wages for qualifying child and dependent care services.
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Any disabled person who is not physically or mentally able to
Care of the qualifying person. Care includes the cost of services
care for himself or herself whom you can claim as a dependent (or
for the qualifying person’s well-being and protection. It does not
could claim as a dependent except that the person had gross income
include the cost of clothing or entertainment.
of $3,400 or more or filed a joint return.)
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You can include the cost of care provided outside your home for
Any disabled person who is not physically or mentally able to
your dependent under age 13 or any other qualifying person who
care for himself or herself whom you could claim as a dependent
regularly spends at least 8 hours a day in your home. If the care was
except that you (or your spouse if filing a joint return), could be
provided by a dependent care center, the center must meet all appli-
claimed as a dependent on another taxpayer’s 2007 return.
cable state and local regulations. A dependent care center is a place
If you are divorced or separated, see Special rule for children of
that provides care for more than six persons (other than persons
divorced or separated parents on this page.
who live there) and receives a fee, payment, or grant for providing
Sch. 2-1
Cat. No. 30139Y
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