Instructions for Form 2441 (2021)

Child and Dependent Care Expenses

Section references are to the Internal Revenue Code unless otherwise noted.

2021


Instructions for Form 2441 - Main Contents

Future Developments

For the latest information about developments related to Form 2441 and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form2441.

What’s New

Changes to the credit for child and dependent care expenses for 2021.

For 2021, the American Rescue Plan Act of 2021 (the ARP) increases the amount of the credit for child and dependent care expenses. It also makes the credit refundable for taxpayers that meet certain residency requirements, increases the percentage of employment-related expenses for qualifying care considered in calculating the credit, and modifies the phaseout of the credit for higher earners. For 2021, you may claim the credit on qualifying employment-related expenses of up to $8,000 (previously $3,000) if you had one qualifying person, or $16,000 (previously $6,000) if you had two or more qualifying persons. The maximum credit in 2021 increases to 50% of your employment-related expenses, which equals a maximum credit of $4,000 if you had one qualifying person (50% of $8,000), or $8,000 (50% of $16,000) if you had two or more qualifying persons. The more a taxpayer earns, the lower the percentage of employment-related expenses that are considered in determining the credit. Under the ARP, the adjusted gross income level at which the credit percentage starts to phase out is raised to $125,000 for 2021. Above $125,000, the 50% credit percentage goes down as income rises. For 2021, the credit figured on line 9a is unavailable for any taxpayer with adjusted gross income over $438,000; however, you may still be eligible to claim a credit on line 9b. See the instructions for line 8 for the 2021 phaseout schedule. To see if you meet the residency requirements to qualify for the refundable credit, see the instructions for line B. The refundable credit is reported on line 10. The nonrefundable credit is reported on line 11. For more information about the credit, see Pub. 503, Child and Dependent Care Expenses, available at IRS.gov/Pub503, and frequently asked questions at IRS.gov/CDCCFAQS.

Changes to dependent care benefits for 2021.

The ARP permits employers to increase the maximum amount that can be excluded from an employee’s income through a dependent care assistance program. For 2021, the maximum amount is increased to $10,500 (previously $5,000). For married employees filing separate returns, the maximum amount is increased to $5,250 (previously $2,500). Dependent care benefits are reported on line 12.

Temporary special rules for dependent care flexible spending arrangements (FSAs).

Section 214 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 provides temporary COVID-19 relief for dependent care FSAs. This legislation allows employers to amend their dependent care plan to allow unused amounts to be used in a subsequent year. It also allows employers to amend their dependent care plan to allow participants to use amounts in a subsequent year if a dependent turned 13 before the funds were used. Unused amounts from 2020 are added to the maximum amount of dependent care benefits that are allowed for 2021. See the instructions for line 13.

New checkbox on line 1, column (d).

There is a new checkbox on line 1, column (d), for you to indicate if your care provider is your household employee. See column (d), under line 1, later.

Credit for prior year’s expenses and worksheet for 2020 expenses paid in 2021.

The credit for prior year’s expenses is now reported separately on line 9b. Previously, it was added to the current year credit and reported together on one line. We moved Worksheet A, Worksheet for 2020 Expenses Paid in 2021, from Pub. 503 to the end of these instructions. If you paid 2020 expenses in 2021, you must complete Worksheet A to figure the amount to enter on line 9b. See the instructions for line 9b.

Reminders

Married persons filing separately checkbox on line A.

Generally, married persons must file a joint return to claim the credit. If you claim the credit and your filing status is married filing separately, you are required to show you meet the special requirements listed later under Married Persons Filing Separately by checking the checkbox located on line A above Part I on Form 2441. See Line A, later, for more information.

Purpose of Form

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 in 2021, you may be able to take the credit for child and dependent care expenses.

In addition, if you (or your spouse if filing jointly) received any dependent care benefits for 2021, you must use Form 2441 to figure the amount, if any, of the benefits you can exclude from your income. You must complete Part III of Form 2441 before you can figure the credit, if any, in Part II.

You (and your spouse if filing jointly) must have earned income to take the credit or exclude dependent care benefits from your income. But see If You or Your Spouse Was a Student or Disabled, later, if either of these circumstances applies.

Additional information.

See Pub. 503 for more details. Also see frequently asked questions at IRS.gov/CDCCFAQS.

Definitions

Dependent Care Benefits

Dependent care benefits may include:

  • Amounts your employer paid directly to either you or your care provider for the care of your qualifying person(s) while you worked,

  • The fair market value of care in a daycare facility provided or sponsored by your employer, and

  • Pre-tax contributions you made under a dependent care FSA.

Your salary may have been reduced to pay for these benefits. If you received dependent care benefits as an employee, they should be shown in box 10 of your Form W-2, Wage and Tax Statement. Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O.

Qualifying Person(s)

A qualifying person is any of the following.

  1. A qualifying child under age 13 whom you can claim as a dependent. If the child turned 13 during the year, the child is a qualifying person for the part of the year he or she was under age 13.

  2. Your disabled spouse who wasn't physically or mentally able to care for himself or herself.

  3. Any disabled person who wasn't physically or mentally able to care for himself or herself whom you can claim as a dependent or could claim as a dependent except:

    1. The disabled person had gross income of $4,300 or more,

    2. The disabled person filed a joint return, or

    3. You (or your spouse if filing jointly) could be claimed as a dependent on another taxpayer's 2021 return.

If you are divorced or separated, see Special rule for children of divorced or separated parents or parents who live apart below. See the instructions for line 13, later, for a special rule that allows 2020 dependent care benefits reported on line 13 to be used in 2021 for a qualifying child that is under age 14.

To find out who is a qualifying child and who is a dependent, see Pub. 501, Dependents, Standard Deduction, and Filing Information.

.This is an Image: caution.gifTo be a qualifying person, generally the person must have lived with you for more than half of 2021..

Special rule for children of divorced or separated parents or parents who live apart.

Even if you can't claim your child as a dependent, he or she is treated as your qualifying person if:

  • The child was under age 13 or wasn't physically or mentally able to care for himself or herself;

  • The child received over half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year;

  • The child was in the custody of one or both parents for more than half the year; and

  • You were the child's custodial parent.

Generally, the custodial parent is the parent with whom the child lived for the greater number of nights in 2021. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. For details and an exception for a parent who works at night, see Pub. 501.

Generally, the noncustodial parent can't treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents or parents who live apart.

Qualified Expenses

These include amounts paid for household services and care of the qualifying person while you worked or looked for work. Your work can be for others or in your own business and it can be either in or out of your home. Child support payments aren't qualified expenses. Also, expenses reimbursed by a state social service agency aren't qualified expenses.

Generally, if you worked or actively looked for work during only part of the period in which you incurred the expenses, you must figure your expenses for each day. However, there are special rules for temporary absences or part-time work. Also, if part of an expense is work related (for either household services or the care of a qualifying person) and part is for other purposes, you have to divide the expense. However, you don't have to divide the expense if only a small part is for other purposes. See Pub. 503 for more details.

Household Services

These are services needed to care for the qualifying person as well as to run the home while you worked or looked for work. They include, for example, the services of a cook, maid, babysitter, housekeeper, or cleaning person if the services were partly for the care of the qualifying person. However, they don't include the services of a chauffeur, bartender, or gardener.

You can also include your share of the employment taxes paid on wages for qualifying child and dependent care services.

Care of the Qualifying Person

Expenses are for the care of a qualifying person while you worked or looked for work only if their main purpose is for the person's well-being and protection. It doesn't include the cost of food, lodging, education, clothing, or entertainment.

You can include the cost of care provided outside your home for your dependent under age 13, or any other qualifying person who regularly spends at least 8 hours a day in your home. If the care was provided by a dependent care center, the center must meet all applicable state and local regulations. A dependent care center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center isn't run for profit.

You can include amounts paid for items other than the care of your child (such as food and schooling) only if the items are incidental to the care of the child and can't be separated from the total cost. But don't include the cost of schooling for a child in kindergarten or above. You can include the cost of a day camp, even if it specializes in a particular activity, such as computers or soccer. But don't include any expenses for sending your child to an overnight camp, summer school, or a tutoring program.

Medical Expenses

Some disabled spouse and dependent care expenses can qualify as medical expenses if you itemize deductions on Schedule A (Form 1040). However, you can't claim the same expense as both a dependent care expense and a medical expense. See Pub. 502, Medical and Dental Expenses, and Pub. 503 for details.

Who Can Take the Credit or Exclude Dependent Care Benefits?

You can take the credit or the exclusion if all five of the following apply.

  1. Your filing status may be single, head of household, qualifying widow(er) with dependent child, or married filing jointly. If your filing status is married filing separately, see Married Persons Filing Separately, later.

  2. The care was provided so you (and your spouse if filing jointly) could work or look for work. However, if you didn't find a job and have no earned income for the year, you can't take the credit or the exclusion. But if you or your spouse was a full-time student or disabled, see the instructions for lines 4 and 5, later.

  3. The care must be for one or more qualifying persons. See Qualifying Person(s), earlier.

  4. The person who provided the care wasn't your spouse, the parent of your qualifying child, or a person whom you can claim as a dependent. If your child (including stepchild or foster child) provided the care, he or she must have been age 19 or older by the end of 2021, and he or she can't be your dependent.

  5. You report the required information about the care provider on line 1 and, if taking the credit, the information about the qualifying person on line 2.

Married Persons Filing Separately

Generally, married persons must file a joint return to claim the credit. If your filing status is married filing separately and all of the following apply, you are considered unmarried for purposes of claiming the credit on Form 2441.

  • You lived apart from your spouse during the last 6 months of 2021.

  • Your home was the qualifying person's main home for more than half of 2021.

  • You paid more than half of the cost of keeping up that home for 2021.

If you meet all of the requirements to be treated as unmarried and meet items 2 through 5 listed earlier, you can generally take the credit or the exclusion. If you don't meet all of the requirements to be treated as unmarried, you can’t generally take the credit. However, you can generally take the exclusion if you meet items 2 through 5.

Example.

Amy separated from her spouse in March. She isn't separated under a decree of divorce or separate maintenance agreement and uses the married filing separately filing status. Amy maintains a home for herself and Sam, her disabled father. Sam is permanently and totally disabled and unable to care for himself.

Because Sam earns $5,600 in interest income, Amy can't claim him as a dependent (his gross income is greater than $4,300). And, because Amy isn't able to claim Sam as a dependent and she is still married as of the end of the year, she can't use the head of household filing status. Amy's filing status is married filing separately and Sam is a qualifying person for the child and dependent care credit.

Because of the following facts, Amy is able to claim the credit for child and dependent care expenses even though Amy uses the married filing separately filing status.

  • Amy didn't live with her spouse for the last 6 months of the year.

  • She has maintained a home for herself and Sam (a qualifying person) since she separated from her spouse in March.

  • She maintains her own household and provides more than half of the cost of maintaining that home for herself and Sam.

  • Amy pays an adult daycare center to care for Sam to allow her to work.

Line Instructions

Line A

If your filing status is married filing separately and you meet the requirements to claim the credit for child and dependent care expenses, you must check the box on line A. By checking the box, you are confirming that you meet the requirements listed earlier under Married Persons Filing Separately.

Line B

For 2021, your credit for child and dependent care expenses is refundable if you, or your spouse if married filing jointly, had a principal place of abode in the United States for more than half of 2021. This means you, or your spouse if married filing jointly, must have your main home in one of the 50 states or the District of Columbia for more than half of the tax year. Your main home can be any location where you regularly live. Your main home may be your house, apartment, mobile home, shelter, temporary lodging, or other location and doesn’t need to be the same physical location throughout the tax year. If you're temporarily away from your main home because of illness, education, business, or vacation, you're generally treated as living in your main home during that time. If you meet these requirements, you must check the box on line B. If you don't check the box on line B, your credit for 2021 is nonrefundable and limited by the amount of your tax.

Military personnel stationed outside the United States.

U.S. military personnel who are stationed outside the United States on extended active duty are considered to have their main home in one of the 50 states or the District of Columbia for purposes of qualifying for the refundable portion of the credit. For this purpose, “extended active duty” means any period of active duty pursuant to a call or order to active duty for a period in excess of 90 days or for an indefinite period.

Additional information.

For more information, including rules for people living in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or the U.S. Virgin Islands, see frequently asked questions at IRS.gov/CDCCFAQS. Form 1040-NR filers should also see the Instructions for Form 1040-NR for additional information about claiming the refundable credit.

.This is an Image: taxtip.gifForm 2441 and these instructions use the terms "refundable" and "nonrefundable" when discussing the credit for child and dependent care expenses. The term "refundable" means the credit isn't limited to the amount of your taxes, so even if your credit exceeds the amount of federal income tax that you owe, you can still claim the full amount of your credit and the amount of the credit in excess of your tax liability can be refunded to you. The term "nonrefundable" means the credit is limited by law to the amount of your taxes. If you checked the box on line B, your credit is refundable and it is reported on Form 2441, line 10, and on Schedule 3 (Form 1040), line 13g, and you don't enter any amount on Form 2441, line 11. If you didn’t check the box on line B, your credit is nonrefundable and you may not enter on Schedule 3 (Form 1040), line 13g, the amount from line 10. Instead, you enter the portion of line 10 that you can claim as a nonrefundable credit on line 11. The nonrefundable credit on line 11 is reported on Schedule 3 (Form 1040), line 2..

Line 1

Complete columns (a) through (e) for each person or organization that provided the care. You can use Form W-10, Dependent Care Provider's Identification and Certification, or any other source listed in its instructions to get the information from the care provider. If you don't give correct or complete information, your credit (and exclusion, if applicable) may be disallowed unless you can show you used due diligence in trying to get the required information.

If you have more than three care providers, check the box above line 1 and attach a statement to your return with the required information. Be sure to put your name and social security number (SSN) on the statement. In this situation, all the lines on line 1 of Form 2441 must be completed with information for the three highest paid providers. The attached statement must provide the same information for the additional providers not listed on the form. The attached statement may optionally include the full list of providers including the ones already listed on the form, but you should indicate which providers listed on the statement are also listed on the form.

If you had neither a qualifying person nor any care providers for 2021, and you are filing Form 2441 only to report taxable income in Part III, enter “none” on line 1, column (a).

Due Diligence

You can show a serious and earnest effort (due diligence) to get the information by keeping in your records a Form W-10 completed by the care provider. Or you may keep one of the other sources of information listed in the instructions for Form W-10. If the provider doesn't give you the information, complete the entries you can on line 1. For example, enter the provider's name and address. Enter “See Attached Statement” in the columns for which you don't have the information. Then, attach a statement to your return explaining that the provider didn't give you the information you requested.

.This is an Image: caution.gifDon't list an ineligible related individual as a care provider on line 1. No credit is allowed for any amount paid to your spouse, the parent of your qualifying child, or a person whom you can claim as a dependent. If your child (including stepchild or foster child) provided the care, he or she must have been age 19 or older by the end of the year, and he or she can't be your dependent. .

Columns (a) and (b)

Enter the care provider's name and address. If you were covered by your employer's dependent care plan and your employer furnished the care (either at your workplace or by hiring a care provider), enter your employer's name in column (a). Next, enter “See W-2” in column (b). Then, leave columns (c), (d), and (e) blank. But if your employer paid a third party (not hired by your employer) on your behalf to provide the care, you must give information on the third party in columns (a) through (e).

Column (c)

If the care provider is an individual, enter his or her SSN or individual taxpayer identification number (ITIN). Otherwise, enter the provider's employer identification number (EIN). If the provider is a tax-exempt organization, enter “Tax-Exempt” in column (c).

U.S. citizens and resident aliens living abroad.

If you are living abroad, your care provider may not have, and may not be required to get, a U.S. taxpayer identification number (for example, an SSN or EIN). If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. If you lived abroad in 2021, your credit may not be refundable; see the instructions for line B, earlier.

Column (d)

Check the box in column (d) if the care provider is your household employee. If you pay someone to come to your home and care for your dependent or spouse and you can control not only what work is done, but how it is done, you may be a household employer and you may need to file Schedule H (Form 1040), Household Employment Taxes, with your tax return and pay household employment taxes. For more information on a household employer's tax responsibilities, see Schedule H (Form 1040) and its instructions, and Pub. 926, Household Employer’s Tax Guide.

Column (e)

Enter the total amount you actually paid in 2021 to the care provider. Also, include amounts your employer paid to a third party on your behalf. It doesn't matter when the expenses were incurred. Don't reduce this amount by any reimbursement you received.

Line 2

Complete columns (a) through (c) for each qualifying person. If you have more than three qualifying persons, check the box on line 2 and attach a statement to your return with the required information. Be sure to put your name and SSN on the statement. In this situation, all the lines on line 2 of Form 2441 must be completed with information for the three people with the highest qualifying expenses. The attached statement must provide the same information for the additional qualifying people not listed on the form. The attached statement may optionally include the full list of qualifying people including the ones already listed on the form, but you should indicate which qualifying people listed on the statement are also listed on the form.

.This is an Image: caution.gifDon't list a person on line 2 unless they are listed as an eligible person under Qualifying Person(s), earlier..

Column (b)

You must enter the qualifying person's SSN. Be sure the name and SSN entered agree with the person's social security card. Otherwise, at the time we process your return, we may reduce or disallow your credit. If the child was born and died in 2021 and didn't have an SSN, enter “Died” in column (b) and attach a copy of the child's birth certificate, death certificate, or hospital medical records.

To find out how to get an SSN, see Social Security Number (SSN) in the Instructions for Form 1040. If the name or SSN on the person's social security card isn't correct, call the Social Security Administration at 800-772-1213.

If the qualifying person has an individual taxpayer identification number (ITIN) or adoption taxpayer identification number (ATIN), see Taxpayer identification number in Pub. 503.

Column (c)

Enter the qualified expenses you incurred and paid in 2021 for the person listed in column (a). If you completed Part III, don't include in column (c) any benefits shown on line 28. Don't include in column (c) the following qualified expenses.

  • Expenses you incurred in 2020 but didn't pay until 2021. Instead, see the instructions for line 9b.

  • Expenses you incurred in 2021 but didn't pay until 2022. You may be able to use these expenses to increase your 2022 credit.

  • Expenses you prepaid in 2021 for care to be provided in 2022. These expenses can only be used to figure your 2022 credit.

To qualify for the credit, you must have one or more qualifying persons. You should show the expenses for each qualifying person in column (c) of line 2. The maximum amount of work-related expenses you can take into account for purposes of the credit is $16,000 if you have two or more qualifying persons even if you only incurred expenses for just one of them. For example, if you have two qualifying children, one age 3 and one age 11, and you incur $16,000 of qualifying work-related expenses for the 3-year-old, and no qualifying work-related expenses for the 11-year-old, the maximum total amount of the credit is $8,000 (50% of $16,000). In this situation, you should list $16,000 for the 3-year-old child and -0- for the 11-year-old child. The $16,000 limit would be used to compute your credit unless you have already excluded or deducted, in Part III, certain dependent care benefits paid to you (or on your behalf) by your employer.

Lines 4 and 5

If filing jointly, figure your and your spouse's earned income separately. Enter your earned income on line 4 and your spouse's earned income on line 5.

Earned income for figuring the credit generally includes the following amounts.

  1. The amount shown on Form 1040 or 1040-SR, line 1; or Form 1040-NR, line 1a, minus any amount:

    1. Included for a scholarship or fellowship grant that wasn't reported to you on a Form W-2,

    2. Excluded as foreign earned income (including any housing exclusion) on Form 2555, line 43,

    3. Also reported on Schedule SE (Form 1040) because you were a member of the clergy or you received $108.28 or more of church employee income,

    4. Received for work performed while an inmate in a penal institution, or

    5. Received as a pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457(b) plan. This amount may be reported in box 11 of Form W-2. If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity.

  2. The amount shown on Schedule SE (Form 1040), line 3, minus any deduction you claim on Schedule 1 (Form 1040), line 15.

    If you use either optional method to figure self-employment tax, subtract any deduction you claim on Schedule 1 (Form 1040), line 15, from the total of the amounts shown on Schedule SE (Form 1040), lines 3 and 4b.

    If you received church employee income of $108.28 or more, subtract any deduction you claim on Schedule 1 (Form 1040), line 15, from the total of the amounts shown on Schedule SE (Form 1040), lines 3, 4b, and 5a.

  3. If you are filing Schedule C (Form 1040) as a statutory employee, the amount shown on line 1 of the schedule.

  4. Nontaxable combat pay, if you elect to include it in earned income. However, including this income will only give you a larger credit if your (or your spouse's) other earned income is less than the amount entered on line 3. To make the election, include all of your nontaxable combat pay in the amount you enter on line 4 (line 5 for your spouse if filing jointly).

    If you are filing jointly and both you and your spouse received nontaxable combat pay, you can each make your own election. (In other words, if one of you makes the election, the other one can also make it but doesn't have to.) The amount of your nontaxable combat pay should be shown in box 12 of your Form(s) W-2 with code Q.

.This is an Image: taxtip.gifYou can choose to include your nontaxable combat pay in earned income when figuring your credit, even if you choose not to include it in earned income for the earned income credit (EIC) or the exclusion or deduction for child and dependent care benefits..

.This is an Image: caution.gifYou must reduce your earned income by any loss from self-employment..

Child support payments received by you aren't included in your gross income and aren't considered as earned income for figuring this credit.

See Pub. 503 for additional details on what is considered earned income.

If You or Your Spouse Was a Student or Disabled

Your spouse's earned income.

Your spouse was a full-time student if he or she was enrolled as a full-time student at a school for some part of each of 5 calendar months during 2021. The months need not be consecutive. A school doesn't include an on-the-job training course, a correspondence school, or a school offering courses only through the Internet. Your spouse was disabled if he or she wasn't physically or mentally capable of caring for himself or herself. Figure your spouse's earned income on a monthly basis.

For each month or part of a month your spouse was a student or was disabled, he or she is considered to have worked and earned income. His or her earned income for each month is considered to be at least $250 ($500 if you had two or more qualifying persons at any time during 2021). Enter that amount on line 5. If your spouse also worked during that month, use the higher of $250 (or $500) or his or her actual earned income for that month.

For any month that your spouse wasn't a student or disabled, use your spouse's actual earned income if he or she worked during the month.

Your earned income.

These rules for a spouse who was a student or disabled also apply to you if you were a student or disabled. For each month or part of a month you were a student or disabled, your earned income is considered to be at least $250 ($500 if you had two or more qualifying persons at any time during 2021). Enter that amount on line 4. If you also worked during that month, enter the higher of $250 (or $500) or your actual earned income for that month.

Both spouses were students or disabled.

If, in the same month, both you and your spouse were either students or disabled, only one of you can be treated as having earned income in that month under these rules.

Special Situations

  • If you are filing jointly, disregard community property laws in determining the earned income of an individual.

  • If your spouse died in 2021, see Pub. 503.

Line 8

Enter on line 8 the decimal amount shown next that applies to the amount on line 7. If line 7 is over $438,000, don't complete line 8. Enter zero on line 9a. You may be able to claim a credit on line 9b.

2021 Phaseout Schedule
               
If line 7 is:
Over:
  But not over: The decimal amount to enter on line 8 is: If line 7 is:
Over:
  But not over: The decimal amount to enter on line 8 is:
$0 $125,000 .50 $175,000 $177,000 .24
125,000 127,000 .49 177,000 179,000 .23
127,000 129,000 .48 179,000 181,000 .22
129,000 131,000 .47 181,000 183,000 .21
131,000 133,000 .46 183,000 400,000 .20
133,000 135,000 .45 400,000 402,000 .19
135,000 137,000 .44 402,000 404,000 .18
137,000 139,000 .43 404,000 406,000 .17
139,000 141,000 .42 406,000 408,000 .16
141,000 143,000 .41 408,000 410,000 .15
143,000 145,000 .40 410,000 412,000 .14
145,000 147,000 .39 412,000 414,000 .13
147,000 149,000 .38 414,000 416,000 .12
149,000 151,000 .37 416,000 418,000 .11
151,000 153,000 .36 418,000 420,000 .10
153,000 155,000 .35 420,000 422,000 .09
155,000 157,000 .34 422,000 424,000 .08
157,000 159,000 .33 424,000 426,000 .07
159,000 161,000 .32 426,000 428,000 .06
161,000 163,000 .31 428,000 430,000 .05
163,000 165,000 .30 430,000 432,000 .04
165,000 167,000 .29 432,000 434,000 .03
167,000 169,000 .28 434,000 436,000 .02
169,000 171,000 .27 436,000 438,000 .01
171,000 173,000 .26 438,000 No limit .00
173,000 175,000 .25      

Line 9b

If you had qualified expenses for 2020 that you didn't pay until 2021 and you didn't claim a credit on the maximum amount of qualified expenses for 2020, you may be able to increase the amount of the credit you can take in 2021. To figure the credit, complete Worksheet A at the end of these instructions. Enter on line 9b the amount from line 13 of Worksheet A. The amount on line 9b is a refundable credit for 2021 if you checked the box on line B.

Example.

In 2020, Kate had childcare expenses of $2,600 for her 12-year-old child. Of the $2,600, she paid $2,000 in 2020 and $600 in 2021. Kate will use Worksheet A to figure her credit on the 2020 expenses paid in 2021. The credit for these expenses will be entered on her 2021 Form 2441, line 9b.

Line 10

Add lines 9a and 9b and enter the result on line 10. If you checked the box on line B, this is your refundable credit for child and dependent care expenses; enter the amount from this line on Schedule 3 (Form 1040), line 13g, and don’t complete line 11. If you didn’t check the box on line B, go to line 11.

Line 11

.This is an Image: caution.gifOnly complete line 11 if you did not check the box on line B. If you checked the box on line B, leave line 11 blank..

If you didn’t check the box on line B, your credit is nonrefundable and limited by the amount of your tax. You may not enter on Schedule 3 (Form 1040), line 13g, the amount from line 10. Instead, you must complete the Credit Limit Worksheet next to figure the amount to enter on line 11. The nonrefundable credit on line 11 is reported on Schedule 3 (Form 1040), line 2.

Credit Limit Worksheet

1. Enter the amount from Form 2441, line 10 1. _____
2. Enter the amount from Form 1040, 1040-SR, or 1040-NR, line 18 2. _____
3. Enter the amount from Schedule 3 (Form 1040), line 1 (foreign tax credit) and line 6l (Form 8978, line 14) 3. _____
4. Subtract line 3 from line 2. If zero or less, stop; you can’t take the credit 4. _____
5. Enter the smaller of line 1 or line 4 here; also enter this amount on Form 2441, line 11, and on Schedule 3 (Form 1040), line 2 5. _____

Line 12

Enter the total amount of dependent care benefits you received in 2021. Amounts you received as an employee should be shown in box 10 of your Form(s) W-2, however, don’t include amounts reported in box 10 that exceed your plan's exclusion and are therefore reported as wages in box 1 of Form(s) W-2. The ARP permits employers to increase the maximum amount that can be excluded from an employee’s income through a dependent care assistance program. For 2021, the maximum amount is increased to $10,500 (previously $5,000). For married employees filing separate returns, the maximum amount is increased to $5,250 (previously $2,500).

Line 13

If you had an employer-provided dependent care plan, your employer may have permitted you to carry forward any unused amount from 2020 to use in 2021. Enter on line 13 the amount you carried forward and used in 2021.

Temporary special rules for unused amount in dependent care FSAs.

Section 214 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 allows your employer to amend its dependent care plan to allow employees to carry over unused benefits from a plan year ending in 2020 to a plan year ending in 2021 and from a plan year ending in 2021 to a plan year ending in 2022. Alternatively, your employer may extend the claims period for a plan year ending in 2020 or 2021 to 12 months after the end of the plan year for unused benefits remaining in the dependent care FSA. Your employer can tell you whether your dependent care plan was amended. Unused amounts from 2020 are added to the maximum amount of dependent care benefits that are allowed for 2021. For more information about these rules, see Notice 2021-15, 2021-10 I.R.B. 898, available at IRS.gov/irb/2021-10_IRB#NOT-2021-15, and Notice 2021-26, 2021-21 I.R.B. 1157, available at IRS.gov/irb/2021-21_IRB#NOT-2021-26.

Temporary carryforward rule for dependent care FSAs where dependent aged out during the COVID-19 pandemic.

Section 214 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 allows your employer to amend its dependent care plan to extend the maximum age of eligible dependents from 12 to 13 for dependent care FSAs for unused amounts from the 2020 plan year carried over into the 2021 plan year. Your employer can tell you whether your dependent care plan was amended. If your employer’s plan has adopted this change, you may use unused dependent care benefits from the 2020 plan year carried over into the 2021 plan year to pay for a child under age 14 for 2021. This relief only applies to amounts received from a dependent care plan and entered on Form 2441, line 13; it does not apply to amounts you paid outside of a dependent care plan. For more information about this relief, see Notice 2021-15.

Line 14

If you had an employer-provided dependent care plan, enter on line 14 the total of the following amounts included on line 12 or 13.

  • Any amount you forfeited. You forfeited an amount if you didn't receive it because you didn't incur the expense. Don't include amounts you expect to receive at a future date.

  • Any amount you didn't receive but are permitted by your employer to carry forward and use in the following year.

Example.

Under your employer's dependent care plan, you chose to have your employer set aside $5,000 to cover your 2021 dependent care expenses. The $5,000 is shown in box 10 of your Form W-2. In 2021, you incurred and were reimbursed for $4,950 of qualified expenses. You would enter $5,000 on line 12 and $50, the amount forfeited, on line 14. You would also enter $50 on line 14 if, instead of forfeiting the amount, your employer permitted you to carry the $50 forward to use during the grace period in 2022.

.This is an Image: caution.gifDon't enter on line 14 any amounts that aren't already entered on line 12 or 13. Therefore, if you carried forward dependent care benefits from 2020 to 2021, and you didn't use the benefits in 2021 and are carrying the benefits forward to 2022, as described in Notice 2021-26, you would not enter these amounts on line 12, 13, or 14. .

Line 15

Add the amounts on lines 12 and 13 and subtract from that total the amount on line 14. Enter the result on line 15.

Line 16

Enter the total of all qualified expenses incurred in 2021 for the care of your qualifying person(s). It doesn't matter when the expenses were paid.

Example.

You received $2,000 in cash under your employer's dependent care plan for 2021. The $2,000 is shown in box 10 of your Form W-2. Only $900 of qualified expenses were incurred in 2021 for the care of your 5-year-old dependent child. You would enter $2,000 on line 12 and $900 on line 16.

Line 18

If filing jointly, figure your and your spouse's earned income separately. Enter your earned income on line 18 and your spouse's earned income on line 19. If your filing status is married filing separately or you or your spouse was a student or disabled, see the instructions for line 19, later.

Earned income for figuring the amount of dependent care benefits you are able to exclude or deduct from your income generally includes the following amounts.

  1. The amount shown on Form 1040 or 1040-SR, line 1; or Form 1040-NR, line 1a, minus any amount:

    1. Included for a scholarship or fellowship grant that wasn't reported to you on a Form W-2,

    2. Excluded as foreign earned income (including any housing exclusion) on Form 2555, line 43,

    3. Also reported on Schedule SE (Form 1040) because you were a member of the clergy or you received $108.28 or more of church employee income,

    4. Received for work performed while an inmate in a penal institution, or

    5. Received as a pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457(b) plan. This amount may be reported in box 11 of Form W-2. If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity.

  2. The amount shown on Schedule SE (Form 1040), line 3, minus any deduction you claim on Schedule 1 (Form 1040), line 15.

    If you use either optional method to figure self-employment tax, subtract any deduction you claim on Schedule 1 (Form 1040), line 15, from the total of the amounts shown on Schedule SE (Form 1040), lines 3 and 4b.

    If you received church employee income of $108.28 or more, subtract any deduction you claim on Schedule 1 (Form 1040), line 15, from the total of the amounts shown on Schedule SE (Form 1040), lines 3, 4b, and 5a.

  3. If you are filing Schedule C (Form 1040) as a statutory employee, the amount shown on line 1 of the schedule.

  4. Nontaxable combat pay, if you elect to include it in earned income. However, including this income will only give you a larger exclusion or deduction if your (or your spouse's) other earned income is less than the amount entered on line 17. To make the election, include all of your nontaxable combat pay in the amount you enter on line 18 (line 19 for your spouse if filing jointly).

    If you are filing jointly and both you and your spouse received nontaxable combat pay, you can each make your own election. (In other words, if one of you makes the election, the other one can also make it but doesn't have to.) The amount of your nontaxable combat pay should be shown in box 12 of your Form(s) W-2 with code Q.

    .This is an Image: taxtip.gifYou can choose to include your nontaxable combat pay in earned income when figuring your exclusion or deduction, even if you choose not to include it in earned income for the earned income credit (EIC) or the credit for child and dependent care expenses..

    .This is an Image: caution.gifFor purposes of line 18, earned income doesn't include any dependent care benefits shown on line 12..

    .This is an Image: caution.gifYou must reduce your earned income by any loss from self-employment..

Special Situations

  • If you are filing jointly, disregard community property laws in determining the earned income of an individual.

  • If your spouse was a full-time student or disabled in 2021, see the instructions for lines 4 and 5, earlier.

Line 19

If your filing status is married filing separately, see Married Persons Filing Separately, earlier. Are you considered unmarried under that rule?

Yes. Enter your earned income (from line 18) on line 19.
No. Enter your spouse's earned income on line 19. If you or your spouse was a full-time student or disabled in 2021, see the instructions for lines 4 and 5.

Line 21

Enter on line 21 the maximum amount that you may exclude for the year under your dependent care plan. For 2021, the ARP permits employers to increase to $10,500 (previously $5,000) the maximum amount that can be excluded from an employee's income through a dependent care assistance program. For married employees filing separate returns, the maximum amount is increased to $5,250 (previously $2,500). Your employer can tell you whether your dependent care plan was amended to increase the amount that can be excluded. Additionally, as discussed earlier in the instructions for line 13, your employer may have amended their plan to allow employees to carry over unused benefits from a plan year ending in 2020 to a plan year ending in 2021. Don't enter more than the maximum amount allowed under your dependent care plan. For example, if your dependent care plan only allows a maximum of $5,000 to be excluded, substitute $5,000 for the $10,500 amount to enter on line 21.

Line 24

Include your deductible benefits in the total entered on Schedule C (Form 1040), line 14; Schedule E (Form 1040), line 19 or line 28; or Schedule F (Form 1040), line 15, whichever applies.

Line 26

If line 26 is more than zero, you have taxable dependent care benefits. Include this amount in the total on Form 1040 or 1040-SR, line 1; or Form 1040-NR, line 1a, whichever applies. Enter “DCB” in the space to the left of that line to show that taxable dependent care benefits are included in that amount.

Lines 27 Through 31

If you are reporting dependent care benefits in Part III of the form, you will need to complete lines 27 through 31 if you are also claiming the credit for child and dependent care expenses in Part II of the form.

Worksheet A.Worksheet for 2020 Expenses Paid in 2021

Use this worksheet to figure the credit you may claim for 2020 expenses paid in 2021.

1.   Enter the amount reported on your 2020 Form 2441, line 3 1.   _____
2.   Enter your 2020 qualified expenses paid in 2021 2.   _____
3.   Add the amounts on lines 1 and 2 3.   _____
4.   Enter $3,000 if you had one qualifying person ($6,000 if you had two or more) 4.   _____
5.   Enter any dependent care benefits received for 2020 and deducted on your return and/or excluded from your income (from your 2020 Form 2441, lines 24 and 25) 5.   _____
6.   Subtract the amount on line 5 from the amount on line 4 and enter the result 6.   _____
7.   Compare your earned income for 2020 and your spouse's earned income for 2020 and enter the smaller amount 7.   _____
8.   Compare the amounts on lines 3, 6, and 7, and enter the smallest amount 8.   _____
9.   Enter the amount on which you figured the credit for 2020 (from your 2020 Form 2441, line 6) 9.   _____
10.   Subtract the amount on line 9 from the amount on line 8 and enter the result. If zero or less, stop here. You can't increase your 2021 credit by any previous year's expenses 10.   _____
11.   Enter your 2020 adjusted gross income (from your 2020 Form 1040, 1040-SR, or 1040-NR, line 11) 11.   _____
12.   Find your 2020 adjusted gross income in the table below and enter the corresponding decimal amount here 12.   _____
 
      IF your 2020 adjusted gross income is:   THEN the decimal amount is:        
        Over:   But not over:              
        $ 0 $15,000       0.35        
        15,000 17,000       0.34        
        17,000 19,000       0.33        
        19,000 21,000       0.32        
        21,000 23,000       0.31        
        23,000 25,000       0.30        
        25,000 27,000       0.29        
        27,000 29,000       0.28        
        29,000 31,000       0.27        
        31,000 33,000       0.26        
        33,000 35,000       0.25        
        35,000 37,000       0.24        
        37,000 39,000       0.23        
        39,000 41,000       0.22        
        41,000 43,000       0.21        
        43,000 No limit       0.20        
 
13.   Multiply line 10 by line 12 and enter the amount here and on Form 2441, line 9b 13.   _____
14.   Name, address, and identifying number of persons or organizations who provided the care:
    _____
15.   First and last name and taxpayer identification number of the qualifying person that received the care:
    _____
Attach to your tax return a copy of this worksheet or a statement explaining how you figured the credit for prior year expenses that includes all the same information that is in the worksheet, including the name, address, and taxpayer identification number of the persons or organizations providing the care and the name and taxpayer identification number of the person for whom you paid for care.