These Taxpayers Can Get 50% of Their Child Care Expenses Refunded — Here’s How

A women waves goodbye to her mother and son from across the street as she leaves the house.
SolStock / Getty Images/iStockphoto

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.

See: 5 Presidents Who Raised Taxes the Most, and 5 Who Lowered Them
Find: Taxes 2022: Tax Breaks for Filers over 50

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.
Make Your Money Work

Learn: 80% Don’t Rely on a Tax Professional to Do Their Taxes – Here Are the Top Mistakes They Make
Explore: The Wildest Things Your Taxes Are Paying For

The tax credit could be worth as much as $8,000 for one qualifying person and $16,000 for two or more qualifying individuals.

More From GOBankingRates

About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

Best Bank Accounts of May 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.