Am I permitted to claim the same expenses on both my Federal income taxes and my DCRA?
You are not permitted to claim the same expenses on both your Federal income taxes and DCRA, although in certain situations you may be able to take advantage of both the DCRA and the Child and Dependent Care Tax Credit. If you have two or more qualifying individuals as dependents, the IRS allows you to apply up to $6,000 of dependent care expenses to your taxes. The maximum allowable under a DCRA is $5,000, so you may apply the $1,000 incremental difference between the DCRA maximum and the Child and Dependent Care Tax Credit if you have two or more dependents and your expenses exceed $5,000.
Note: For the Child and Dependent Care Tax Credit, which is different than your DCRA, you may use up to $3,000 of the expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals. These dollar limits must be reduced by the amount of any dependent care benefits that you exclude from your income. It is always best to check with your tax advisor if you have a DCRA and are trying to determine what, if any, dependent care expenses can also be applied to your taxes.