Understanding the child and dependent care credit is essential for ensuring your clients maximize their tax savings while staying compliant with IRS rules. You need to be equipped with this knowledge to accurately determine eligibility based on qualifying expenses, income and dependents – helping you file error-free returns and provide expert guidance.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers.

Q: Can the caregiver be a grandparent (e.g., not an official day care or preschool)?

A: Facts and circumstances will dictate. The expenses must be paid to someone whom the taxpayer (and spouse, if filing jointly) cannot claim as a dependent.

Q: If the parent works night shifts, can overnight summer camps count as dependent care?

A: The cost of day camps may be considered employment-related expenses. However, the cost of overnight camps does not qualify.

Q: Can a payment made to an ex-spouse to pay for day care expenses count as payment to a provider?

A: Not if the ex-spouse is the qualifying person’s parent. You can count some work-related payments made to other relatives, even if they live in your house. However, do not count any amounts paid to:

• A person you (or your spouse, in the case of a joint return) can claim as a dependent
• Your child who was under age 19 at the end of the year, even if the child isn’t your dependent
• A person who was your spouse at any time during the year, or
• The parent of your qualifying person if your qualifying person is also your child and under age 13

To learn more about child and dependent care credit benefits, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial.

Question: Upon reviewing Nathan and Tabitha’s joint tax return, you notice the premium tax credit (PTC) they typically qualify for has not been calculated by the software as expected. The couple are budding entrepreneurs and purchased health insurance through a federally facilitated health insurance marketplace. They did not receive any advance premium tax credit (APTC) payments throughout the year. After verifying that the pair otherwise qualifies for the PTC, you rescan the Form 1095-A, Health Insurance Marketplace Statement, they presented and observe that Form 1095-A, Part III, Column B, is blank. Could this be why the software isn’t generating the PTC, and, if so, how can this be fixed?

Answer: Yes, the second lowest-cost silver plan (SLCSP) is a key component in calculating the PTC, along with income and family size. When APTC is not paid for coverage, the SLCSP premium on Form 1095-A, Part III, Column B, may be incorrect, reported as -0-, or left blank, as is the case with Nathan and Tabitha’s form. The taxpayers are directed not to request a corrected form. Instead, the health coverage tax lookup tool located at https://www.healthcare.gov/tax-tool/#/ will determine their correct SLCSP premium. This figure must then be manually entered/adjusted on Form 1095-A, Part III, Column B. You easily assist them with this process in the office, and after doing so, the PTC is now properly appearing on their return.

The tax industry isn’t just changing – it’s evolving at an unprecedented pace. Tax professionals must be future-ready to stay competitive with new regulations, advancing technology and shifting client expectations. The question isn’t whether change will happen but how you will thrive.

The most significant tax industry changes expected in 2025

As we move into 2025, several key trends are reshaping the tax landscape:

AI and automation in tax preparation – Artificial intelligence streamlines compliance, tax planning and document management. Understanding how to integrate AI-driven tax tools for tax professionals will be critical for staying ahead.

IRS enforcement and compliance shifts – With ongoing IRS crackdowns on employee retention credit (ERC) claims, cryptocurrency taxation and small business audits, tax professionals must proactively understand IRS compliance changes in 2025.

The rise of advisory services – Clients expect more than just tax preparation – they want strategic financial planning and advisory services for tax professionals. Offering client advisory services (CAS) is becoming a must for firm growth.

Expiring tax provisions (Tax Cuts and Jobs Act (TCJA) sunset) – As the TCJA nears expiration, tax professionals must be prepared to guide clients through expiring tax provisions and 2025 tax law updates that will impact deductions, credits and tax planning.

Remote workforce and multi-state tax challenges – More businesses are operating across state lines, creating complex tax compliance issues for remote workers and tax implications for multi-state businesses.

What this means for tax professionals

With these industry shifts, tax professionals must adapt or risk falling behind. The key to success in 2025 is education, networking and preparation – and that’s exactly what Taxposium 2025 is designed for.

Why Taxposium 2025 is the must-attend tax event of the year

Taxposium 2025 is the premier tax conference for CPAs, enrolled agents (EAs), accountants and tax preparers who want to stay ahead of industry changes. This is not just another tax seminar – it’s a transformative experience designed to help you navigate industry changes, master new skills and grow your tax practice.

What you’ll gain at Taxposium 2025:

• Cutting-edge insights on AI in tax preparation, automation and the future of tax technology
• Exclusive updates on IRS tax law changes, compliance shifts and audit trends
• Strategies for thriving in an evolving industry – whether you’re a solo practitioner, CPA, EA or firm leader
• Networking with tax professionals and industry leaders who are shaping the future of the profession
• Actionable takeaways to implement in your practice immediately

How Taxposium 2025 helps you stay ahead

Attending Taxposium 2025 will give you the tools to navigate IRS compliance changes, 2025 tax law updates and tax practice management strategies. With exclusive access to expert-led discussions and networking opportunities, you’ll leave with practical solutions to implement immediately in your firm.

Who should attend?

• CPAs, enrolled agents (EAs), accountants, tax preparers and tax firm owners looking to stay competitive
• Tax professionals looking to expand into advisory services and provide strategic financial planning
• Experts in AI, automation and tax technology seeking insights on emerging tax tools
• Anyone seeking to network with forward-thinking tax professionals and industry leaders

Don’t just keep up – lead the future of tax

Change isn’t something to fear – it’s your greatest opportunity. Tax professionals who embrace innovation and adapt to industry shifts will thrive in the future of the tax profession.

📅 Secure your spot at Taxposium 2025! Early-bird pricing ends June 2. Register now and take the first step toward future-proofing your tax career.