True or False: Both spouses must have earned income to claim the child and dependent care credit.

The statement that both spouses must have earned income to claim the child and dependent care credit is not accurate. In fact, the correct understanding is that only one spouse needs to have earned income for the couple to qualify for this credit. This credit is designed to assist families with the costs of child and dependent care in order to enable them to work or actively look for work.

If a couple files jointly, they can still qualify for the child and dependent care credit as long as at least one spouse has earned income. This allowance recognizes that not every household has dual income earners, and it still provides support for caregiving expenses that facilitate gaining or maintaining employment.

The credit is not contingent upon both spouses having earned income, which is why the assertion that both must be employed to claim the credit is false. Thus, the statement is categorized as false.