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<\/a><\/figure><\/div>What is the child and dependent care tax credit?<\/h2>
The child and dependent care credit is a tax credit that can help working families offset the care expenses for a qualifying child or dependent that enable you to work, job hunt or attend school.<\/p>
What are the qualifications for the child and dependent care tax credit?<\/strong><\/h2>Families can claim a child care tax deduction as long as they meet the following three requirements:<\/p>
- The care must be for a child under the age of 13;<\/li>
- Your family must need child care because both you and your spouse work, are looking for work or are full-time students;<\/li>
- You must have qualifying child or dependent care-related expenses.<\/li><\/ol>
<\/a>What expenses can I apply to the child care tax credit?<\/strong><\/h2>According to the IRS, you can apply any child care expense that is for the well-being and protection of your child. A few examples of qualifying expenses are:<\/p>
- Your nanny’s wages<\/a>.<\/li>
- Fees paid to a placement agency to match your nanny with your family.<\/li>
- The household employer taxes paid on top of the nanny’s wages.<\/li>
- The cost of daycare<\/a>, preschool or other similar programs.<\/li>
- The cost of before- and after-school programs.<\/li>
- Tuition for a day camp<\/a> (overnight camps are excluded).<\/li><\/ul>
<\/a>How do I claim the child care tax credit on my 2025 taxes<\/strong>?<\/h2>You will need to file IRS Form 2441<\/a> with your personal federal income tax return in order to claim the child and dependent care tax credit. The form asks for your care-related expenses for the calendar year and then calculates your savings based on a percentage determined by your adjusted gross income (AGI). The credit can be as much as 35%, but most families will see a 20% savings.<\/p>You are limited on how much in child care expenses you can claim, based on how many kids you have. The expense limit is $3,000 for one child or $6,000 for two or more children. That means the majority of families can expect to save up $600 if they have one child and up to $1,200 if they have two or more children.<\/p>
<\/a>Child care tax credit savings scenario<\/strong><\/h2>A family hires a nanny to watch their two daughters ages 5 and 3 during the weekdays while they’re at work. They pay their caregiver $46,000 for the year, withhold the appropriate taxes from them and pay the required employer taxes. The family’s cost as a household employer breaks down like this:<\/p>
Nanny cost before tax breaks<\/h3>
<\/a>What expenses can I apply to the child care tax credit?<\/strong><\/h2>According to the IRS, you can apply any child care expense that is for the well-being and protection of your child. A few examples of qualifying expenses are:<\/p>
- Your nanny’s wages<\/a>.<\/li>
- Fees paid to a placement agency to match your nanny with your family.<\/li>
- The household employer taxes paid on top of the nanny’s wages.<\/li>
- The cost of daycare<\/a>, preschool or other similar programs.<\/li>
- The cost of before- and after-school programs.<\/li>
- Tuition for a day camp<\/a> (overnight camps are excluded).<\/li><\/ul>
<\/a>How do I claim the child care tax credit on my 2025 taxes<\/strong>?<\/h2>You will need to file IRS Form 2441<\/a> with your personal federal income tax return in order to claim the child and dependent care tax credit. The form asks for your care-related expenses for the calendar year and then calculates your savings based on a percentage determined by your adjusted gross income (AGI). The credit can be as much as 35%, but most families will see a 20% savings.<\/p>You are limited on how much in child care expenses you can claim, based on how many kids you have. The expense limit is $3,000 for one child or $6,000 for two or more children. That means the majority of families can expect to save up $600 if they have one child and up to $1,200 if they have two or more children.<\/p>
<\/a>Child care tax credit savings scenario<\/strong><\/h2>A family hires a nanny to watch their two daughters ages 5 and 3 during the weekdays while they’re at work. They pay their caregiver $46,000 for the year, withhold the appropriate taxes from them and pay the required employer taxes. The family’s cost as a household employer breaks down like this:<\/p>
Nanny cost before tax breaks<\/h3>
<\/a>How do I claim the child care tax credit on my 2025 taxes<\/strong>?<\/h2>You will need to file IRS Form 2441<\/a> with your personal federal income tax return in order to claim the child and dependent care tax credit. The form asks for your care-related expenses for the calendar year and then calculates your savings based on a percentage determined by your adjusted gross income (AGI). The credit can be as much as 35%, but most families will see a 20% savings.<\/p>You are limited on how much in child care expenses you can claim, based on how many kids you have. The expense limit is $3,000 for one child or $6,000 for two or more children. That means the majority of families can expect to save up $600 if they have one child and up to $1,200 if they have two or more children.<\/p>
<\/a>Child care tax credit savings scenario<\/strong><\/h2>A family hires a nanny to watch their two daughters ages 5 and 3 during the weekdays while they’re at work. They pay their caregiver $46,000 for the year, withhold the appropriate taxes from them and pay the required employer taxes. The family’s cost as a household employer breaks down like this:<\/p>
Nanny cost before tax breaks<\/h3>
You are limited on how much in child care expenses you can claim, based on how many kids you have. The expense limit is $3,000 for one child or $6,000 for two or more children. That means the majority of families can expect to save up $600 if they have one child and up to $1,200 if they have two or more children.<\/p>