Child and Dependent Care Credit

Posted in Finance, Accounting and Economics Terms, Total Reads: 713
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Definition: Child and Dependent Care Credit

The Child and Dependent Care Credit is a nonrefundable tax credit which is given to eligible taxpayers individuals in the US so that they can care for child and dependent. 

The credit is nonrefundable, meaning that the credit amount is limited to the amount of taxes you owe.

The purpose of the credit is to allow the taxpayer to be gainfully employed.


Eligibility Criteria:-

  • Dependents under age 13 for whom a dependency exemption may be claimed,
  • Dependents of any age who share the same principal place of abode as the taxpayer and are physically or mentally incapable of taking care for themselves,
  • Spouses of any age who share the same principal place of abode as the taxpayer and are physically or mentally incapable of taking care for themselves, or
  • Certain dependent children of divorced parents


Amount of Child and Dependent Care Credit

Adjusted Gross Income

Percentage of Costs

0 - $15,000

35%

$15,001 - $43,000

34% - 21%
(sliding scale)

over $43,000

20%


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