For the tax year 2022 and 2023, the dependent care credit will revert to being non-refundable. You may be eligible for 35% of child care or similar costs up to a maximum of $3,000 for 1 child under the age of 13 or up to $6,000 for 2 or more dependents. Your child must be under age 13 or disabled to qualify. You may also be able to claim this credit for care paid for a disabled spouse or dependent that lived with you more than half of the year. The full credit amount is limited to households making less than $15,000 a year.
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Tax Year 2021 ONLY
For tax year 2021 The American Rescue Plan Act increased the amount of credit you can receive and made it so that you may have a refundable credit of up to $4,000 for one qualifying individual or up to $8,000 for two or more qualifying individuals.
What does refundable credit mean?
If you qualify for a refundable child care credit this means that you may be eligible to receive a credit even if you did not owe any federal income tax.
Who is eligible for the credit?
You may be eligible to claim the dependent care credit if:
- You (or your spouse if filing a married filing joint return) lived in the US for more than half the year. If you are military, special rules apply if you were stationed outside the US.
- You paid expenses for a qualifying individual needing care to allow you (and your spouse if filing married filing joint) to work or if you were actively looking for employment.
Does my dependent qualify?
To qualify, the dependent must be under the age of 13 or must be a spouse or other dependent of any age who is disabled and has lived with you for more than 6 months of the year.
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Tax Year 2020 ONLY
For the tax year 2020 you may be eligible for 20% to 35% of child care or similar costs up to a maximum of $3,000 for 1 child under the age of 13 or up to $6,000 for 2 or more dependents. Your child must be under age 13 or disabled to qualify. You may also be able to claim this credit for care paid for a disabled spouse or dependent that lived with you more than half of the year.