These Taxpayers Can Get 50% of Their Child Care Expenses Refunded — Here’s How
The child and dependent care credit is just one of the tax programs expanded for the 2021 tax year. That means more families and individuals will qualify for the credit than ever before, and the credit could put more money back into taxpayers’ pockets than it has in the past.
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The IRS has issued a “filing season reminder”: If you paid for the care of a child ages 12 or younger — or another person who was mentally or physically unable to care for themselves — you could qualify to have as much as 50% of those expenses reimbursed as a fully refundable tax credit. That means even if the credit exceeds your tax bill (or you don’t owe taxes at all) you could still qualify. Taxpayers with an adjusted gross income of more than $438,000 do not qualify for this credit.
If you meet the income threshold, you may be able to claim the tax credit if you paid a childcare center, summer camp, or other individual or organization to care for your child (under the age of 13) or to care for a qualifying spouse who could not care for themselves.
You may also be able to claim the credit if you cared for any individual you claimed as a dependent during the 2021 tax year — or if you could have claimed that person as a dependent except that:
- You were claimed as a dependent on someone else’s return.
- The qualifying person in need of care received gross income of $4,300 or more.
- The qualifying person could be claimed as a dependent on someone else’s tax return.
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The tax credit could be worth as much as $8,000 for one qualifying person and $16,000 for two or more qualifying individuals.
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