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What is the Child and Dependent Care Credit?

SOLVEDby TurboTax5252Updated 3 weeks ago

The Child and Dependent Care Credit (not to be confused with the similar-sounding Child Tax Credit) can reduce your tax bill if you paid for a dependent's care so that you could work or look for work.

To qualify for this credit, you must meet all of these criteria:

  • You (and your spouse, if filing jointly) must have earned income
    • The earned income requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2022)
  • You paid caregiving expenses so that you (and your spouse, if filing jointly) could work or look for work
    • The work/look for work requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2022)
  • You paid a caregiver to care for a Qualifying Person. The caregiver can't be:
    • Your spouse
    • Your dependent
    • Your child if they were under 19 on the last day of 2022, even if not your dependent
    • The parent of the Qualifying Person, if the Qualifying Person is your child under the age of 13 during 2022
  • Your filing status is not Married Filing Separately (except under certain circumstances)
  • You can provide the care provider's name, address, and their SSN, ITIN, or EIN on your return (unless it's a tax-exempt organization)

The credit is worth as much as 35% of your qualified expenses, up to $3,000, (for one qualifying person), and $6,000 (for two or more qualifying persons). Your percentage depends on your AGI, with the higher percentages applying to lower incomes and vice-versa.

For example, a married couple supporting two qualifying persons who paid $6,000 in qualified expenses may qualify for up to $2,100 in credits, depending on their AGI. 

TurboTax will determine your eligibility and calculate the maximum credit allowed.

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