If you paid someone to care for a qualifying individual so you could work or look for work, you may be eligible for the Child and Dependent Care Credit.
For tax year 2026, this credit is nonrefundable. That means it can reduce your tax liability to zero, but it won't increase your refund if you don't owe any tax.
How Much Is the Credit Worth?
You may be able to claim up to 35% of your qualifying care expenses. The percentage you can claim depends on your adjusted gross income (AGI).
The maximum amount of expenses you can use to calculate the credit is:
- $3,000 for one qualifying individual
- $6,000 for two or more qualifying individuals
The highest credit percentage applies to taxpayers with lower income. As income increases, the percentage gradually decreases, but many taxpayers still qualify for a partial credit.
Who Is a Qualifying Individual?
A qualifying individual generally includes:
- A child under age 13 when the care was provided
- Your spouse who was physically or mentally incapable of self-care and lived with you for more than half the year
- A dependent who was physically or mentally incapable of self-care and lived with you for more than half the year
Who Can Claim the Credit?
You may qualify if:
- You paid care expenses for a qualifying individual so you could work or actively look for work.
- You (and your spouse, if filing jointly) lived in the United States for more than half the year. Special rules may apply to certain military members stationed outside the United States.
- You meet all other IRS eligibility requirements for the credit.
What Expenses Qualify?
Qualified expenses may include payments made to:
- Day care centers
- Babysitters
- Nannies
- Before-school or after-school care programs
- Adult day care providers
- Other individuals who provided qualifying care
The care must have been necessary so you could work or look for work.
What Does Nonrefundable Mean?
A nonrefundable credit can reduce the tax you owe, but it can't create a refund by itself.
For example:
- If you owe $500 in federal income tax and qualify for a $500 credit, your tax bill is reduced to $0.
- If you owe no tax, you generally won't receive the unused portion of the credit as a refund.