Taxpayer paid for the full year of child care expenses in 2007 at the amount of $10,000. The payment covered the period from July 2007 to June 2008. Does the taxpayer claim child care expense of only $5,000 or the full amount of $10,000 in 2007?
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On Page 11-5 of TTB
Timing of payments. Expenses qualify for the credit in the year
incurred or the year paid, whichever is later.
Prepaid expenses. Expenses cannot be claimed until the year care
is provided. Include 2006 payments for care provided in 2007 as
qualified expenses in 2007. Do not include 2007 payment of 2008
expenses until 2008.
Comment