Do Child Care Costs Go Into The Schedule?

Child and Dependent Care Credit is a tax credit that can be claimed for child care expenses paid for a qualifying child under 13 or a disabled dependent of any age. The credit is up to 35% of qualifying expenses, which can range from $3,000 ($1,050) for one child or dependent to $6,000 ($2,100) for two or more children or dependents. Expenses paid for before- or after-school care of a child in kindergarten or higher-grade levels are considered work-related expenses, provided all other conditions are met.

In 2021, the credit was fully refundable if the taxpayer or their spouse had a job as a childcare provider. This tax break helps offset the costs of caregiving expenses. If you pay someone to care for your child or other qualifying person, you may be eligible to claim certain child care expenses as a deduction on your personal income tax return.

To claim the credit, you must meet certain tests and use Schedule A (Form 1040) to figure your itemized deductions. In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your dependent care benefits received from your employer. Additionally, the expenses claimed may not exceed $5,000.

If you are the only person supporting the child, you may be entitled to childcare benefit, which is a contribution towards the costs of childcare. You can use Form T778: Child care expenses deduction to claim child care expenses you paid for your child(ren) in 2023. IRS Form 2441 is used to report child and dependent care expenses as part of your Federal income tax return.

The Child and Dependent Care Credit allows taxpayers to decrease expenses for child care (children under the age of 13) and adult dependents by claiming the credit on their tax return.