How much can you get back for the Child and Dependent Care Credit?
The child and dependent care credit is a tax credit that may help taxpayers pay for the care of eligible children and other qualifying dependents. Taxpayers that have qualifying expenses can claim the credit while they are at work, look for work, or attend school. There are significant changes to the credit only applicable to the 2021 tax year. For 2021, taxpayers can claim expenses incurred up to $8,000 with one qualifying child, and up to $16,000 for taxpayers with two or more qualifying children. You can now get 50% of these expenses that you claimed as a REFUNDABLE credit, which means you can get up to $4,000 (with one qualifying child) or up to $8,000 (with two or more qualifying children) back even if you don’t owe any taxes (if you meet the other requirements as well). The amount of the credit will be larger than in prior years, and more taxpayers will be eligible for the credit for the first time. The credit begins to phase out when the taxpayer’s AGI exceeds $125,000, and reduced below 20% if income is over $400,000.
But do you qualify for the credit?
You are eligible to claim this credit if you:
Have a qualifying person (children under 13, a mentally or physically disabled spouse, or a mentally or physically disabled person who lived with you for more than half of the year and is your dependent).
Pay someone to care for one or more qualifying persons in order for you to work or look for work.
Have income level within the income limits set for the credit.
Are married, you must file a joint return to claim the credit. However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still claim the credit.
For any questions or concerns on this credit, please reach out to us.
Source: IRS.gov
