The Nebraska Child Care Tax Credit Act presents a significant financial relief for eligible parents and legal guardians. Starting from the tax year 2024, this refundable tax credit aims to ease the burden of child care expenses. This guide will walk you through understanding and completing your Care Credit Application efficiently.
Who is Eligible for the Child Care Tax Credit?
To qualify for the Nebraska Child Care Refundable Tax Credit, parents or legal guardians must meet specific criteria. Crucially, this credit is designed for those with young children and moderate incomes. Here’s a breakdown of the eligibility requirements:
- Child’s Age: Your child must be 5 years old or younger as of December 31st of the tax year for which you are applying. Essentially, they must be under 6 years old at the end of the year. For example, if your child turned 6 on December 30, 2024, they would not qualify for the 2024 tax year.
- Dependent Status: The child must be claimed as your dependent on your federal income tax return.
- Income Limits: Your total household income must be $150,000 or less to be eligible.
- Child Care Arrangement: Your child must be in one of the following care arrangements:
- Enrolled in a child care program licensed under the Child Care Licensing Act.
- Receiving care from an approved, license-exempt provider participating in the child care subsidy program.
- Your total household income is at or below 100% of the federal poverty level, regardless of the specific care arrangement.
Understanding the Credit Amounts
The amount of the child care tax credit you can receive depends on your total household income. The credit is structured to provide more substantial assistance to lower-income families:
- $2,000 per child: For households with a total income of $75,000 or less.
- $1,000 per child: For households with a total income between $75,000 and $150,000.
Households with incomes exceeding $150,000 are not eligible for this credit. It’s important to note that “total household income” refers to your federal modified adjusted gross income. You can find resources online to calculate your Total household income.
How to Submit Your Care Credit Application via eDASH
The Nebraska Department of Revenue (DOR) has streamlined the care credit application process through their Electronic Document & Application Submission Hub (eDASH). Applying online via the Electronic Document & Application Submission Hub (eDASH) portal is mandatory to receive the tax credit. Here’s a step-by-step guide:
- Access eDASH: Click on the eDASH link provided by the Nebraska Department of Revenue to access the portal.
- Create an Account or Log In: If you are a new user, you will need to create an account. Returning users can log in with their existing credentials.
- Locate the Application: Navigate to the Child Care Refundable Tax Credit Application within the eDASH portal. Form 7203, the application form, can be submitted here electronically.
- Provide Required Information: You will need to provide specific information to complete your care credit application. Ensure you have all necessary documents and details ready before starting. A detailed list of required information is available here on the DOR website.
- Submit Your Application: Once you have filled out all required fields and uploaded any necessary documents, submit your application through the eDASH portal.
It is crucial to apply for and receive approval confirmation from the DOR before claiming the credit on your Nebraska individual income tax return. Applications are processed in the order they are received, and the total annual credit amount is capped at $15 million. Applying early increases your chances of securing the credit.
Key Takeaways for Your Care Credit Application
- Apply Early: The program has a funding limit, so submitting your care credit application as soon as possible is advisable.
- Use eDASH: The eDASH portal is the designated platform for application submission. It’s fast, easy, and secure.
- Gather Required Information: Prepare all necessary documentation and information beforehand to ensure a smooth application process.
- Understand Eligibility and Credit Amounts: Familiarize yourself with the income thresholds and eligibility criteria to confirm your qualification and understand the potential credit value.
By understanding these steps and requirements, Nebraska parents and guardians can confidently navigate the care credit application process and potentially benefit from this valuable tax relief program. Remember to consult the official Nebraska Department of Revenue website for the most up-to-date information and resources.
