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Understanding the Child and Dependent Care Credit
If you’re covering child care expenses while working or seeking employment, you might be eligible for a tax credit to help offset some of those costs. The child and dependent care credit allows you to claim work-related care expenses for qualifying dependents on your taxes. For the 2022 tax year, you could receive up to $1,050 for one individual and up to $2,100 for two or more individuals.
Eligibility for the Child and Dependent Care Credit
To determine if you qualify for this credit, consider the following criteria:
- Qualifying Person Test: Care must be provided to a dependent under age 13 or a spouse or other dependent who is physically or mentally unable to care for themselves.
- Earned Income Test: You must have earned income during the year. If married and filing jointly, your spouse must also have earned income.
- Work-Related Expense Test: Care expenses must be specifically for you to work or look for work.
- Restrictions on Care Provider: Payments must be made to providers who are not your dependent, spouse, or the child’s parent.
- Joint Return Test: Married couples must file jointly to qualify, with exceptions for legally separated spouses.
- Provider Identification Test: You need to provide taxpayer identification information for your care provider.
How Much Can You Claim?
The credit covers 20% to 35% of your eligible care expenses, up to $3,000 for one dependent and $6,000 for two or more dependents. The percentage you can claim depends on your adjusted gross income:
| Adjusted Gross Income | Percentage You Can Claim |
|---|---|
| $0 – $15,000 | 35% |
| $15,001 – $17,000 | 34% |
| $17,001 – $19,000 | 33% |
| $19,001 – $21,000 | 32% |
| $21,001 – $23,000 | 31% |
| $23,001 – $25,000 | 30% |
| $25,001 – $27,000 | 29% |
| $27,001 – $29,000 | 28% |
| $29,001 – $31,000 | 27% |
| $31,001 – $33,000 | 26% |
| $33,001 – $35,000 | 25% |
| $35,001 – $37,000 | 24% |
| $37,001 – $39,000 | 23% |
| $39,001 – $41,000 | 22% |
| $41,001 – $43,000 | 21% |
| $43,001 and up | 20% |
Claiming the Child and Dependent Care Credit
To claim this credit, complete Form 2441, Child and Dependent Care Expenses, and include it with your federal income tax return. You’ll need to provide details such as your care provider’s tax ID, your dependent’s Social Security number, your income, and the total of your eligible care expenses.
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