Is It Necessary To Deduct Child Care Costs From Taxes?

The Child and Dependent Care Tax Credit (CDCTC) is a nonrefundable tax credit available to taxpayers with dependent children under the age of 17. It can help offset the costs of caregiving expenses. To claim the credit, taxpayers must complete Form 2441, “Child and Dependent Care Expenses”, and include the form when filing their Federal income tax return.

To claim the credit, U.S. families must have a qualifying child or dependent, child care expenses incurred to either work or look for a job, and a qualifying individual. The CDCTC allows taxpayers to decrease expenses for child care (children under the age of 13) and adult dependents by claiming the credit on their personal income tax return. Eligible families can claim from 20 to 35 of their care expenses up to a maximum of $3,000 for one person, or $6,000 for two or more people (tax year 2023).

There are no tax deductions available for child care for individuals, but you might qualify for other credits or deductions. If your employer paid the child care expenses on your behalf, you can claim the part of the expenses included in your income for the year. To qualify for the credit, the person for whom you’re paying care expenses must be claimed on your taxes as a dependent and be either a parent or guardian.

You can receive up to a 35 credit on qualifying expenses of $3,000 for one child, or up to $6,000 for two or more children. Child care can include a variety of expenses, including babysitters, summer camps, and care providers for disabled children or children under 13.