What Is The Tax Credit For Increased Child Care?

The Additional Child Tax Credit (ACTC) is a refundable portion of the Child Tax Credit (CTC), which can be claimed by families who owe the IRS less than their qualified Child Tax Credit amount. It is a tax break for working people with qualifying dependents, helping to offset the costs of caregiving expenses. The CTC is a non-refundable tax credit available to taxpayers with dependent children under the age of 17. The ACTC allows taxpayers to receive up to $1,600 of the $2,000 CTC per child as a refund for 2023 and 2024.

To claim the credit, taxpayers must meet all eligibility factors and have an annual income not more than $200,000 ($400,000). 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. The credit is worth up to $1,050 for one child, or up to $2,100 for more than one. To claim the credit, taxpayers must complete Form 2441.

The amount of the credit is a percentage of the amount of work-related expenses paid to a care provider for the care of a qualifying individual. The Additional Child Tax Credit can be worth up to $1,600, depending on your income, and you must have at least $2,500 in earned income to claim the credit.