Deductions & credits

Did you have more than $8,000 of expenses ($16,000 for two or more qualifying persons)? The total credit cannot exceed 50% of that amount. These limits are further reduced if you receive a deduction or W-2 exclusion (i.e., dependent care FSA) for child care expenses.

 

Also, was your AGI greater than $125,000? If so, the 50% is reduced.

 

For more specifics on how the child CARE credit (as opposed to the child TAX credit) is figured for 2021, see IRS Publication 503 at https://www.irs.gov/pub/irs-pdf/p503.pdf . See also TurboTax help on this credit at https://ttlc.intuit.com/community/credits-and-deductions/help/what-is-the-child-and-dependent-care-c... .