The American Rescue Plan Act of 2021, was enacted on March 11, 2021, making the Child and Dependent Care credit substantially more generous and potentially refundable(up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons) only for the tax year 2021, This means an eligible taxpayer can receive this credit even if they owe no federal income tax. Your federal income tax may be reduced by claiming the Credit for Child and Dependent Care expenses on your tax return.

Who is eligible to claim the credit?

You may be eligible to claim the child and dependent care credit if:

  • You paid expenses for the care of a qualifying individual to enable you (and your spouse, if filing a joint return) to work or actively look for work.
  • You (or your spouse if filing a joint return) lived in the United States for more than half of the year. However, special rules apply to military personnel stationed outside of the United States.

Find out if you are eligible to claim the Child and Dependent Care credit.

Who Qualifies you for the credit ?

A qualifying person generally is a dependent under the age of 13, a spouse or dependent of any age who is incapable of self-care and who lives with you for more than half of the year.

How is the credit is calculated?

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.

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