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The child and dependent care tax credit (CDCTC) could offset costs related to caring for a qualifying child or dependent while you work or look for work.<\/p>\n
Here\u2019s how it works, who may qualify, and how to claim the credit when you file your federal income tax return.<\/p>\n
The child and dependent care credit (CDCC) is a tax credit for eligible expenses related to caring for qualified dependents. Parents and caregivers can claim this credit on their federal income tax return if they and their qualifying dependents meet certain criteria.<\/p>\n
To claim care expenses, the qualifying person or dependent must have been under age 13 when the care was provided or be a spouse or individual who is physically or mentally incapable of self-care. Additionally, either you (or your spouse if you\u2019re filing a joint tax return) must have incurred the care expenses while working or looking for work.<\/p>\n
Read more: <\/em>Tax credits vs. deductions: Which is better? <\/em><\/p>\n The child and dependent care credit is dollar-for-dollar. That means $3,000 in eligible expenses could lower your tax bill by $3,000. It is, however, nonrefundable. So while it can lower your liability, it won\u2019t trigger a refund \u2014 in other words, if you don\u2019t owe taxes, you won\u2019t get money back.<\/p>\n You also must have earned income. How much you earn will determine the amount of your credit.<\/p>\n The Internal Revenue Service (IRS) uses your adjusted gross income (AGI), which is your total income after pretax deductions, to determine the percentage of eligible care-related expenses you can claim. A lower AGI typically qualifies for more, while a higher AGI qualifies for less.<\/p>\n Regardless of your income, the dependent care credit has a limit \u2014 $3,000 for one dependent or $6,000 for two or more.<\/p>\n The following table shows how much of the child and dependent care credit you can receive based on your AGI for 2025. For 2026, the maximum percentage is expected to increase from 35% to 50%.<\/p>\n The child and dependent care credit helps families reduce taxes and eases child poverty, but there are rules for claiming it. Follow this guide or use the IRS.gov child and dependent care credit tool to ensure you qualify before submitting your tax return.<\/p>\n To claim the child and dependent care tax credit, your filing status needs to be married filing jointly, or you must be the primary custodial caregiver or have supported the dependent for more than half of the calendar year. In situations where there is joint, equal custody, the IRS says that the parent with the higher income can claim the credit.<\/p>\n While this tax credit doesn\u2019t have income limits, you must have earned income during the tax year to qualify. Investment income, Social Security and unemployment benefits, and retirement income don\u2019t qualify as earned income for this credit.<\/p>\n Calculate your adjusted gross income (AGI) by adding up all your taxable income and then subtracting allowed adjustments. Once you know your AGI, you can determine what percentage of qualifying expenses you\u2019ll be eligible to claim.<\/p>\n For taxpayers who are married filing a joint return and one spouse is a full-time student, that spouse is treated as having earned income for each month they are enrolled full time.<\/p>\n Read more: <\/em>What is the earned income tax credit, and do you qualify?<\/em><\/p>\n If your filing status and income mean you\u2019re eligible for this credit, the next step is to see if the following criteria fit the dependent whose care costs you\u2019re trying to claim:<\/p>\n A child, under age 13, whom you can claim as a dependent<\/p>\n<\/li>\n A spouse unable to physically or mentally care for themselves, who lived with you for more than half the year<\/p>\n<\/li>\n A person, regardless of age, who wasn\u2019t able to care for themselves and lived with you for the majority of the year<\/p>\n<\/li>\n<\/ul>\n IRS Publication 503 details specific rules and exceptions for spouses who live apart or those who only provide financial support to a dependent for a certain portion of the year.<\/p>\n Read more: <\/em>Can you claim yourself as a dependent?<\/em><\/p>\n There are two components that define which expenses are eligible for the child and dependent care tax credit: the kinds of costs and the care provider. While the IRS has pretty generous rules about who qualifies as a care provider, certain family members (such as your spouse or an older sibling) and some household employees whose job isn\u2019t to care for the dependent may not qualify either.<\/p>\n Some costs, such as application fees or deposits, may be excluded. And for divorced or separated parents, child support payments are not eligible expenses.<\/p>\n The rules are also tricky for dependent care benefits received through an employer-sponsored care facility, so consult the IRS website for more information.<\/p>\n The IRS requires records and receipts for the eligible expenses you\u2019ve paid, as well as the taxpayer identification number or Social Security number of the person or organization who provided care.<\/p>\n For those filing for the CDCTC for an adult dependent or spouse who can\u2019t care for themselves, you may be asked to provide proof of the nature, extent, and duration of the disability.<\/p>\n Once you\u2019ve double-checked eligibility and gathered your records, you\u2019ll use IRS Form 2441 to claim the tax credit on your tax return.<\/p>\n Keep in mind that for future tax years, it may make sense to take advantage of an employer-sponsored dependent care flexible spending account (DCFSA), where you can set aside up to $5,000 in pretax dollars to pay for childcare costs. In 2026, this maximum increases to $7,000 per household or $3,750 per individual.<\/p>\n The child and dependent care credit is not a refundable credit. This means it can reduce your tax bill, but it can\u2019t generate a refund.<\/p>\n The child tax credit (CTC) lowers the general cost of raising children, not just the costs related to care while you work or look for work. Eligible filers receive a fixed credit of up to $2,200 per child under age 17. Similar to the dependent care credit, your income determines how much you receive.<\/p>\n While you can\u2019t claim expenses for the child and dependent care credit that you paid for with funds from a flexible spending account, you may be able to use both in the same tax year.<\/p>\n For instance, if you emptied out your DCFSA on childcare costs earlier in the year, any additional care expenses you incur could be eligible for the dependent care credit.<\/p>\n<\/p><\/div>\nStep 1: Clarify your filing status and adjusted gross income<\/h3>\n
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1. Is the child and dependent care tax credit refundable?<\/h3>\n