Child and Dependent Care Credit is a tax credit available to eligible taxpayers in the United States. It is designed to help offset the costs of childcare or dependent care expenses.
Child & Dependent Care Credit provides financial assistance to individuals or families who rely on childcare services to enable them to work or pursue employment opportunities.
Credit can be claimed by taxpayers who have incurred expenses for care of children under the age of 13 as well as for disabled dependents of any age who require care.
Percentage of eligible expenses that can be claimed as a credit ranges from 20% to 35% based on adjusted gross income. The higher your AGI, the lower the percentage.
Credit amount is based on eligible expenses with limits & percentages determined by AGI. Maximum amount of eligible expenses is $3,000 per child or dependent ($6,000 for two or more).
Eligible expenses include, Daycare centers, Babysitters, Nannies, Nursery school, Pre and after-school care, Day camps, Dependent care services & other caregivers.
To calculate the credit, multiply your eligible expenses by the applicable percentage determined based on AGI. The result is the amount of credit you can claim.