Child Care Tax Credit: Let’s Talk How It Works

The child and dependent care tax credit (CDCTC) provides a refundable credit of up to 50 percent of child care costs for a child under age 13 or any dependent physically or mentally incapable of self-care.

 

The Secrets Of Child Care Tax Credit

1. The Child and Dependent Care credit is a percentage of your work-related expenses.
2. The  amount of work-related expenses that you use to calculate the credit cannot be more than the earned income of whichever spouse has the lower earned income.
3. Though the child and dependent care tax credit was temporarily expanded and made refundable for 2021, it benefits only a small share of parents because relatively few have formal child care expenses that qualify for the credit.

 

The topic of Child Care Tax Credit is very large and may seem confusing. Visit  our office and talk to our Generational wealth specialist for more about Child Care Tax Credit

 

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