Some background regarding the Child and Dependent Care credit may be helpful at this point. For 2021, total expenses you use to calculate the credit may not be more than $8,000 for one qualifying individual or $16,000 for two or more qualifying individuals. Thus, in your situation, if the amounts you paid were for just one qualifying individual, you would not be able to figure the credit using more than $8,000 as total expenses.
For the 2021 tax year only, the percentage and the child care expense thresholds have changed, so you can get a credit up to 50% of $8,000 ($4,000) in child care expenses for one child under 13, an incapacitated spouse or parent, or another dependent so that you can work and up to 50% of $16,000 in expenses ($8,000) for families with two or more dependents.
There is a income phase out for 2021. For the credit amount begins to phase out when the taxpayer’s adjusted gross income reaches over $125,000. Eligible families with an AGI of $125,000 or less will get a credit worth 50% of their qualifying child care expenses. The credit percentage decreases for families with an AGI over $125,000, and the credit is completely phased out for adjusted gross income of more than $438,000.
Here is a helpful link to a TurboTax article that explains the Child and Dependent Care Credit.
Ins and Outs of the Child and Dependent Care Tax Credit.
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