@mel61780 - NO. You should reduce the amount you are claiming by the amount that was withheld from pay, $1,590.00, The difference, $370.00, is allowable for computing the credit. Use this link below for additional information: Child and Dependent Care Credit
The American Rescue Plan brings significant changes to the amount and way that the child and dependent care tax credit can be claimed for 2021. The plan increases the amount of expense eligible for the credit, relaxes the credit reduction due to income levels, and also makes it fully refundable. This means that, unlike in other years, you can still get the credit even if you don’t owe taxes.
For tax year 2021 (the taxes you file in 2022):
- The amount of qualifying expenses increases from $3,000 to $8,000 for one qualifying person and from $6,000 to $16,000 for two or more qualifying individuals
- The percentage of qualifying expenses eligible for the credit increases from 35% to 50%
- The beginning of the reduction of the credit is increased from $15,000 to $125,000 of adjusted gross income (AGI).
Also for tax year 2021, the maximum amount that can be contributed to a dependent care flexible spending account and the amount of tax-free employer-provided dependent care benefits is increased from $5,000 to $10,500.
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