The Child and Dependent Care Credit is non-refundable for 2025. This means it can reduce your tax liability to zero, but it will not result in a refund if you owe no tax.
You may be eligible for a credit of up to 35% of qualifying care expenses:
- Maximum expenses allowed:
- $3,000 for one qualifying individual
- $6,000 for two or more qualifying individuals
A qualifying individual includes:
- A child under age 13 at the time care was provided
- A spouse or dependent of any age who is physically or mentally incapable of self-care and lived with you for more than half the year
The percentage of expenses you can claim decreases as your income increases. The full 35% credit applies only if your adjusted gross income (AGI) is $15,000 or less. For higher incomes, the percentage gradually reduces, but you may still qualify for a partial credit.
What does refundable credit mean?
A refundable credit allows you to receive money back even if you owe no federal income tax. Since the dependent care credit for 2025 is non-refundable, it can only reduce your tax liability to zero—it cannot generate a refund.
Who is eligible for the credit?
You may claim the credit if:
- You (and your spouse, if filing jointly) lived in the U.S. for more than half the year. Special rules apply for military members stationed outside the U.S.
- You paid care expenses for a qualifying individual so you (and your spouse, if filing jointly) could work or actively look for work.
Does my dependent qualify?
A qualifying individual is:
- A child under age 13 when care was provided
- A spouse or dependent who is disabled and lived with you for more than half the year