Child and Dependent Care Credit: Help With Childcare Costs

Tax Credits · TAX CREDIT

The Child and Dependent Care Credit can cover 20%–35% of up to $6,000 in childcare costs so you can work. Here's who qualifies, what expenses count, and how to claim it.

If you pay for childcare so you can work or look for work, the Child and Dependent Care Credit can offset a meaningful share of those costs. It's separate from the Child Tax Credit — and you can claim both in the same year. Here's how it works and how to make sure you don't leave money on the table.

How Much the Credit Is Worth

The credit covers a percentage of your qualifying care expenses, up to:

• $3,000 in expenses for one qualifying person
• $6,000 in expenses for two or more qualifying persons

The percentage ranges from 20% to 35% depending on your adjusted gross income — lower earners get the higher percentage. For most middle-income families the credit works out to 20%, meaning a maximum benefit of $600 (one dependent) or $1,200 (two or more). At the federal level this credit is nonrefundable.

Who Is a Qualifying Person

Care expenses qualify if they're for:

• A child under age 13 when the care was provided
• A spouse who is physically or mentally unable to care for themselves and lived with you more than half the year
• Another dependent who is incapable of self-care and lived with you more than half the year

The care must enable you (and your spouse, if married) to work or actively look for work.

What Expenses Count

Qualifying expenses include daycare, after-school care, babysitters, nanny costs, and day camps. Costs that do NOT qualify include:

• Overnight camp
• Tuition for kindergarten or higher grades (it's considered education, not care)
• Care provided by your spouse, the child's parent, or your own child under age 19
• Expenses paid while you were not working or looking for work

You must report the care provider's name, address, and taxpayer ID (SSN or EIN) on Form 2441.

Coordinating With a Dependent Care FSA

If your employer offers a Dependent Care Flexible Spending Account (FSA), you can set aside up to $5,000 pre-tax for childcare. However, you can't use the same expenses for both the FSA and the credit. Generally, for families in higher tax brackets the FSA saves more because the money avoids income and payroll tax; lower-income families may benefit more from the credit's higher percentage. A tax professional can calculate the optimal split between the two.

Frequently Asked Questions

Is the Child and Dependent Care Credit the same as the Child Tax Credit?

No. They're two separate credits and you can claim both. The Child Tax Credit is based on having a qualifying child; the Child and Dependent Care Credit is based on paying for care so you can work.

Both parents have to work to claim it?

Generally yes. If you're married filing jointly, both spouses must have earned income (or one must be a full-time student or unable to self-care). Single parents must have earned income.

Does summer day camp count?

Yes — the cost of day camp counts as a care expense. Overnight (sleepaway) camp does not qualify.

Can I claim care paid to a relative?

Sometimes. You can pay a relative as long as they aren't your spouse, the child's parent, your dependent, or your own child under 19. The relative must report the income, and you'll need their Social Security number.