What qualifies as a care provider for the Child and Dependent Care Tax Credit?

Modified on Sun, 05 Feb 2023 at 08:41 PM

The Child and Dependent Care Tax Credit is a tax break that can help offset child care expenses for qualifying families who require childcare while they are working.

To qualify for the Child and Dependent Care Tax Credit for tax year 2022, you must have:

  • A qualifying child or dependent 
  • Child care expenses (while employed or looking for a job)
  • Filed a joint tax return (if married) 
  • A combined income of $15,000 or less (to receive full credit)

You can claim a variety of caretaking expenses with this credit. Expenses for day care centers, preschool, day camps, a babysitter, or even a nanny can all be claimed with this credit. If you pay family members to watch your children or dependents, that expense also qualifies, as long as the caretaker is not younger than 19, another dependent that you claim, your spouse, or the parent of the dependent child. You will have to provide the name of the caretaker and their taxpayer ID (TIN) when claiming this credit.

While the benefits of the Child and Dependent Care tax credit were expanded in 2021, this year, they’ve returned to normal. Parents with one child can claim up to 35% of $3,000 in qualifying expenses, for a maximum amount of $1,050. If you have more than one child, you can claim up to 35% of $6,000, for a maximum of $2,100.

Income thresholds have also changed for the 2022 tax year. While you’ll need to make under $15,000 to be eligible for the maximum credit, families who earn less than $438,000 combined can receive partial credit.

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