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Department of the Treasury

Internal Revenue Service

2004 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 2004, you may be able to take

the credit for child and dependent care expenses. But you must have had earned income to do

Dependent Care

so. 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

2004, you must use Schedule 2 to figure the amount, if any, of the benefits you may exclude

Expenses for

from your income on Form 1040A, line 7. You must complete Part III of Schedule 2 before

you can figure the credit, if any, in Part II.

Form 1040A

Additional information.

See Pub. 503 for more details about the credit.

Filers

3. One or both of the parents had custody of the child for more

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than half of 2004.

You may be able to include nontaxable combat pay in earned in-

4. The child was under age 13 or was disabled and could not take

come when figuring the amount of dependent care benefits you can

care of himself or herself.

exclude from income. For details, see the instructions for line 17.

5. The other parent claims the child as a dependent because —

a. As the custodial parent, you signed Form 8332 or a similar

statement agreeing not to claim the child’s exemption for 2004, or

Definitions

b. Your divorce decree or written agreement went into effect

Dependent care benefits.

These include amounts your employer

before 1985 and it states that the other parent can claim the child as

paid directly to either you or your care provider for the care of your

a dependent and the other parent gave at least $600 for the child’s

qualifying person(s) while you worked. These benefits also include

support in 2004. But this rule does not apply if your decree or agree-

the fair market value of care in a daycare facility provided or spon-

ment was changed after 1984 to say that the other parent cannot

sored by your employer. Your salary may have been reduced to pay

claim the child as a dependent.

for these benefits. If you received dependent care benefits, they

should be shown on your 2004 Form(s) W-2 in box 10.

If this exception applies, the other parent cannot treat the child as

a qualifying person even though the other parent claims the child as

Qualifying person(s).

A qualifying person is:

a dependent.

•

Any child under age 13 whom you can claim as a dependent

These include amounts paid for household

(but see Exception for children of divorced or separated parents on

Qualified expenses.

services and care of the qualifying person while you worked or

this page). If the child turned 13 during the year, the child is a

looked for work. Child support payments are not qualified ex-

qualifying person for the part of the year he or she was under

penses. Also, expenses reimbursed by a state social service agency

age 13.

•

are not qualified expenses unless you included the reimbursement

Your disabled spouse who is not able to care for himself or

in your income.

herself.

•

Household services. These are services needed to care for the

Any disabled person not able to care for himself or herself

qualifying person as well as to run the home. They include, for

whom you can claim as a dependent (or could claim as a dependent

example, the services of a cook, maid, babysitter, housekeeper, or

except that the person had gross income of $3,100 or more or filed a

cleaning person if the services were partly for the care of the quali-

joint return). But if this person is your child, see Exception for chil-

fying person. Do not include services of a chauffeur or gardener.

dren of divorced or separated parents on this page.

You can also include your share of the employment taxes paid

To find out who is a dependent, see the instructions for Form

on wages for qualifying child and dependent care services.

1040A, line 6c.

Care of the qualifying person. Care includes the cost of services

To be a qualifying person, the person must have shared

for the qualifying person’s well-being and protection. It does not

the same home with you in 2004.

include the cost of clothing or entertainment.

You can include the cost of care provided outside your home for

your dependent under age 13 or any other qualifying person who

Exception for children of divorced or separated parents. If you

regularly spends at least 8 hours a day in your home. If the care was

were divorced, legally separated, or lived apart from the other par-

provided by a dependent care center, the center must meet all appli-

ent during the last 6 months of 2004, you may be able to take the

cable state and local regulations. A dependent care center is a place

credit or the exclusion even if your child is not your dependent. If

that provides care for more than six persons (other than persons

your child is not your dependent, he or she is a qualifying person

who live there) and receives a fee, payment, or grant for providing

only if all five of the following apply.

services for any of those persons, even if the center is not run for

profit.

1. You had custody of the child for a longer time in 2004 than

the other parent. See Pub. 501 for the definition of custody.

You can include amounts paid for items other than the care of

2. One or both of the parents provided over half of the child’s

your child (such as food and schooling) only if the items are inci-

support in 2004.

dental to the care of the child and cannot be separated from the total

Sch. 2-1

Cat. No. 30139Y

Instructions For Schedule 2 (Form 1040a) - Child And Dependent Care Expenses For Form 1040a Filers - 2004

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