 Most of this information comes from publication 503 Child and Dependent Care Expenses Taxure 2022. You can find on the IRS website irs.gov, irs.gov. Looking at the income tax formula, we're down on the credit side of things. At the bottom side of the formula, remembering the first half of the income tax formula is in essence an income statement, although a strange one. The bottom line being taxable income similar to net income for a normal income statement where they're going to calculate the tax based on that taxable income, not with one rate but with multiple rates typically because it can have a progressive tax structure to get to the tax before credits and other taxes. Then we're dealing with the credits and other taxes like self-employment taxes and we'll deal with the payments which could be in the form of estimated tax payments or withholdings to get to the bottom line refund or tax due. Also note, credits are similar to deductions in that we like them both but the credit if we could get one dollar of it versus one dollar of a deduction, we would typically want the one dollar credit because we would get the full dollar of credit whereas a deduction would simply reduce the taxable income and the benefit we would be getting would be dependent then on the tax rate. Also remember that the credits can be broken out into two main categories those that are non-refundable and those that are refundable. The non-refundable credits don't take the tax liability below zero because then it would no longer be a tax. The refundable credits do which means in that case the tax code is being used kind of like as a benefit type of program situation. Alright so we're looking at the flowchart we're going to be zooming into each line item of the flowchart it might be easier to kind of systematically think in a flowchart format when you're trying to visualize whether or not someone could qualify for the credit. Alright so we've got the first point here was the care for one or more qualifying persons so if the answer is yes we can continue on if no the nos are all going down to the bottom line here you can't claim the child and dependent care credit in that case so if the answer is yes we go to step number two did you have earned income during the year you'll recall we have to have earned income for this credit because the general idea is that you have the expenses in order to take care of the child so that you can get earned income so if the answer is yes we continue on if no we go down to you can't claim the credit then next one did you expase pay expenses to allow you to work or look for work so that's the general idea you paid for expenses why for the care of the child why so that you could work so the general answer would be yes and there you have this little item down here this also applies to your spouse unless your spouse was disabled or a full-time student in other words if you're single clearly if you hired someone to to help you to take care of the child then you would do that to work if you're married it gets a little bit more complicated because the assumption would be that your spouse could take care of the child if they're not working so you would think that both spouses would be working or something or looking for work or something like that in order to qualify for the credit so if we say yes we continue on next one were your payments made to someone you or your spouse could claim as a dependent so typically if you could claim them as a dependent they can't really take the credit you can imagine why the iris would have a problem with that because if you were able to take the credit for people in your family people would probably structure some strange payments and whatnot to try to maximize tax benefits so you would think but next one