Tax Credit for Child and Dependent Care Expenses
Important: Starting with Tax Year 2018 (Jan. - Dec. 2018), the Child and Dependent Care Credit requirements are changing due to Tax Reform. Our CAREucator tax tool is currently for Tax Year 2017, but you may use it now to get an idea of your 2018 Taxes. We will update the tool and this page as the IRS finalizes the Child and Dependent Care Credit requirements. Tax Reform and you? Let efile.com help you and become eligible to Tax Win. Find out now.
Paying for childcare and dependent care can be very expensive! Fortunately, there is a tax credit to help defray the costs. If you had to pay someone to care for your child, dependent, or spouse so you could work, look for work, go to school, or because of a disability, then the Child and Dependent Care Credit may be for you.
TaxTip: The cost of sending kids to day camp in the summer counts toward the Child and Dependent Care Credit. Overnight camps don't count.
Do I Qualify for the Tax Credit for Child and Dependent Care Expenses?
You will generally qualify for the Child and Dependent Care Credit if you meet all of the following conditions:
- You must have earned income (such as wages from a job). If you are married and filing a joint tax return, your spouse must also have earned income.
- Your filing status is Single, Married Filing Jointly, Head of Household, or Qualifying Widow(er) with a Dependent Child.
- You (and your spouse if Married Filing Jointly) earned income from employment or self-employment. You are exempt from this requirement if you were a full-time student or disabled.
- You paid someone to provide care for a Qualifying Person, and the care provider was not someone you could claim as a dependent, the parent of your Qualifying Person, your spouse, or your child under the age of 19 (regardless of whether they are a dependent).
- You had to pay for child or dependent care so that you (and your spouse if Married Filing Jointly) could work, seek employment, or attend school, or if you were disabled.
Start the "CAREucator"
(Child and Dependent Care Tax Credit)
Was the care for one or more IRS qualifying persons?
Did you have earned income during the year?
Did you pay the expenses to allow you to work or to look for work?
Were your payments made to someone you or your spouse could claim as a dependent?
Were your payments made to your spouse or to the parent of your IRS qualifying child who is under age 13?
Were your payments made to your child who was under age 19 as of 12/31 of the tax year?
Are you filing a joint return with your spouse?
Do you meet the requirements to be considered unmarried?
Do you know the care provider's name, address, and identifying number?
Did you make a reasonable effort to get this information?
Did you pay expenses for more than one qualifying person?
Are you excluding or deducting at least $3,000 of dependent care benefits?
Based on your answers, you may be able to claim the Child and Dependent Care Credit.
Who Can Be My Qualifying Person?
A Qualifying Person for the Child and Dependent Care Credit can be either of the following:
- Any child who is your dependent and was under age 13 when the care was provided, or
- Your spouse or dependent age 13 or over, if physically or mentally incapable of caring for themselves.
In addition, the Qualifying Person must have lived with you for more than half of the year. There are exceptions for a Qualifying Person who was born or died during the year, and for a child of divorced or separated parents.
How Much Is the Child and Dependent Care Credit Worth?
- The Child and Dependent Care Credit can be worth from 20% to 35% of some or all of the dependent care expenses you paid. The percentage you use depends on your income. If your income is below $15,000, you will qualify for the full 35%. The percentage falls by 1% for every additional $2,000 of income until it reaches 20% (for an income of $43,000 or more).
- The 20%-35% is taken from up to $3,000 of expenses paid for one Qualifying Person, or from up to $6,000 of expenses paid for two or more Qualifying Persons. Therefore, the maximum Child and Dependent Care Credit is worth $2,100 (based on 2 or more dependents and $6,000 or more of qualifying expenses).
- Before figuring the credit, you must reduce your qualifying expenses by any amount of child or dependent care benefits that were provided by your employer and that you deducted or excluded from your income.
- The Child and Dependent Care Credit is not refundable, so it is not worth anything if you owe no income tax.
Learn more in Publication 503 - Child and Dependent Care Expenses
How Do I Claim the Child and Dependent Care Tax Credit?
Efile.com makes it easy for you to claim the Child and Dependent Care Credit on your tax return. We will pick out this form for you and help you fill it in. Your completed return will then include the Form 2441 efile it, Child and Dependent Care Expenses.
When you provide the information for the credit you must include the Social Security Number (SSN) of each qualifying person in order to claim the credit, as well as the name, address, and taxpayer identification number of your child or dependent care provider.
What If Another Person Claimed My Dependent?
A Qualifying Person for the Child and Dependent Care Credit may only be claimed on one tax return. If a dependent is claimed on more than one tax return (for example, a child is claimed by both divorced parents) the IRS will apply a set of tiebreaker rules to see who gets to claim the dependent.
Learn about the dependent tiebreaker rules and who gets to claim a child as a dependent
See what other tax credits and tax deductions may be available to you.