Can A Parent Receive Credit For Child Care Alone?

The child and dependent care credit (CDCC) is a tax credit for parents or caregivers who pay out-of-pocket expenses for childcare. It provides relief to individuals and spouses who pay for childcare expenses. In the case of divorced or never-married parents, only the custodial parent can claim the credit. The credit is a non-taxable benefit for taxpayers who are paying someone to take care of their children or another member of the household while they work.

If you paid someone to care for a child under age 13 when the care was provided and whom you claim as a dependent on your tax return, you may qualify. A temporary change codified in the American Rescue Plan allows parents or guardians to claim a maximum credit of $4,000 (50 of $8,000 in expenses) for one child, and $8,000 for two or more children.

The credit does not work unless you enter income earned from working. You can also count work-related payments made to other relatives, even if they live in your house. If your family incurs child care expenses so that a parent can attend school, you may be eligible for a child care tax credit.

In general, the credit can only be claimed if a child is claimed as a tax dependent, but there are special rules for children of divorced or separated parents. The maximum amount of child or dependent care expenses a taxpayer can claim on their taxes is $3,000 for one dependent and $6,000 for two or more children.

Deducting child care costs is only possible if the cost was incurred so both parents can work or attend school, or if one parent is disabled. If married, you and your spouse usually file as Married Filing Jointly (MFJ), and the Child and Dependent Care Credit gets smaller at higher incomes.