Federal law provides a tax credit for parents who must pay for child care. The credit is available to any parent, regardless of income.

The Tax Reform Act of 1976 allows the following: Up to $400 a year for one child, up to $800 a year for two or more. The credit is deducted from the tax payment due the government after one's income tax is computed.

Parents who work part-time or are full-time students are also eligible to file for the credit. Single parents can claim the credit if they have custody of the child. If custody is shared, the parent who has custody for the greater part of the year gets the tax benefit. (It does not matter whether the single parent claims the child as a dependent on his or her return.)

The credit is 20 per cent of child care costs, or a maximum of $400 for one child, $800 for two or more children under 15 years of age.

Here's how it works: If a working parent of one child pays $150 a month to a day care center, the annual child care bill is $1,800. Twenty per cent of $1,800 is $360 so the tax credit is $360. If a parent pays $200 a month to a center, the yearly child care costs are $2,400. Twenty per cent of $2,400 is $480, which is over the $400 a year maximum.

The Internal Revenue Service publishes a guide for parents, Publication 503, Child Care and Disabled Dependent Care. They will also answer questions at 557-9230.