Child and Dependent Care Tax Credit

Child and Dependent Care Tax Credit

The Child and Dependent Care Tax Credit is a federal tax credit available to taxpayers who pay for child care or care for a qualifying dependent while they work or look for work.

This credit allows individuals to claim a percentage of their qualifying care expenses, which can reduce their overall tax liability. The percentage is based on the taxpayer’s income and the amount spent on care, with a maximum allowable expense limit. For example, if a taxpayer incurs $3,000 in care expenses for one child, they may be eligible to claim up to 35% of that total, depending on their income level, leading to a potential credit of up to $1,050. Eligible taxpayers must meet specific criteria, including having earned income and ensuring the care is provided for a child under the age of 13 or a dependent who is unable to care for themselves.