Child Care Tax Credit

April 28, 2021

A tax credit is a dollar-for-dollar reduction in taxes owed. Some

credits are refundable – taxes can be reduced to the point that a taxpayer
receives a refund instead of paying taxes. A tax credit is even more valuable
to families than a tax deduction.

Under
current federal law, eligible families can claim child care tax credits* up to:

  • $2,100 from
    the federal Child and Dependent Care Tax Credit (up to $1,050
    for each of your first two children; the exact amount depends on your
    income and actual child care expenses);
  • $2,000 per
    child from the federal Child Tax Credit; and
  • $6,660 from
    the federal Earned Income Tax Credit. (The exact amount depends on your
    income)

Child Care Tax Credit Resources

Detailed
information on federal child care tax credits for parents is available from:

  • The Internal
    Revenue Service: Call (800) TAX-1040 or (800) 829-1040
  • Tax
    Information for Parents:

o    Child and Dependent Care
Tax Credit

o    Child Tax Credit

o    Earned Income Tax Credit

o    The National Women’s Law Center

*
Credit amounts may change from year-to-year, are usually dependent on total
family income and size, and may be subject to maximum income or child care
spending limitations. Consult your tax advisor, the IRS, and state revenue
officials to confirm your eligibility.

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