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The child and dependent care credit is a tax credit that may help you pay for the care of eligible children and other dependents (qualifying persons). The credit is calculated based on your income and a percentage of expenses that you incur for the care of qualifying persons to enable you to go to work, look for work, or attend school.
You must pay child and dependent care expenses so you (or your spouse if filing jointly) can work or look for work. (See Are These Work-Related Expenses, later.) You must make payments for child and dependent care to someone you (and your spouse) can't claim as a dependent.
If you paid someone to care for your child or other qualifying person so you (and your spouse if filing jointly) could work or look for work, you may be able to take the credit for child and dependent care expenses. Your federal income tax may be reduced by claiming the Credit for Child and Dependent Care expenses on your tax return.
Child and Dependent Care Credit Expenses In 2021, for the first time, the credit is fully refundable if the taxpayer, or the taxpayer's spouse if married filing jointly, had a principal place of abode in the United States for more than one-half of 2021.
Credit for Child and Dependent Care Expenses. For tax year 2021 only, the top credit percentage of qualifying expenses increased from 35% to 50%. Some taxpayers receive dependent care benefits from their employers, which may also be called “flexible spending accounts” or “reimbursement accounts.”
If you paid for your child’s or a dependent’s care while you worked or looked for a job, you may be eligible for a credit on your tax return. Your eligibility to claim the child and dependent care credit will depend on the amount you paid to care for a qualifying child, spouse, or other dependent.
For tax year 2024, the maximum amount of care expenses you're allowed to claim is $3,000 for one person, or $6,000 for two or more people.