What is the process for claiming a California tax credit for child and dependent care expenses?

To claim the California tax credit for child and dependent care, you must meet specific income limits, complete Form 3506, and attach it to your state income tax return. The credit is nonrefundable and available only if your California Adjusted Gross Income (AGI) is $100,000 or less. Here is the process for claiming the credit: Step 1: Determine Your Eligibility First, confirm you meet all requirements. You must have paid for care for a qualifying child or dependent so that you (and your spouse, if filing jointly) could work or look for work. A qualifying person is typically your child under age 13 or a dependent or spouse who was physically or mentally incapable of self-care. Crucially, your California AGI must be $100,000 or less. Step 2: Gather All Necessary Documents and Information Collect the name, address, and taxpayer identification number (TIN) or Social Security number (SSN) for each care provider you paid. You will also need records of the total amounts you paid to each provider for the care of your qualifying person during the tax year. Step 3: Complete Federal Form 2441 First The California credit calculation uses information from the federal Child and Dependent Care Expenses form (Form 2441). You must complete this federal form first, even if you do not end up qualifying for the federal credit. Step 4: Complete California Form FTB 3506 Download Form 3506, Child and Dependent Care Expenses Credit, from the California Franchise Tax Board (FTB) website at ftb.ca.gov. Use the figures from your federal Form 2441 and your California tax return to fill out Form 3506 and calculate the exact amount of your state credit. Step 5: Attach and File Your Return Attach the completed Form 3506 to your California Resident Income Tax Return (Form 540 or 540 2EZ). File your complete state tax return electronically or by mail on or before the annual filing deadline, which is typically April 15th. Important details and nuances: This credit is nonrefundable, which means it can reduce the tax you owe to zero, but you will not receive a refund for any credit amount that exceeds your tax liability. This credit is separate from and in addition to the standard Dependent Exemption Credit. Warnings and limitations: The $100,000 AGI limit is strict. If your AGI is even one dollar over, you cannot claim the credit. You must identify your care provider correctly on the form; failure to do so may result in the credit being denied. You should keep all receipts and payment records with your tax files in case the FTB requests proof. This is general information and does not constitute legal advice. For complex situations, consult with a qualified California attorney.