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Child and dependent care credit: 2019 tax year

Working parents with child care expenses can claim this credit, but there are strict requirements.

Updated

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The Child Care Tax Credit, also known as the Child and Dependent Care Tax Credit, was created to provide tax relief for working parents. But you must meet strict requirements to qualify.

What is the Child and Dependent Care Credit?

The Child Care Tax Credit helps working parents pay for daycare expenses for children under 13, incapacitated spouses and qualifying adult dependents.

If you qualify, you can claim up to $3,000 of care expenses for one dependent or $6,000 for two or more dependents. You’ll receive a credit worth 20% to 35% of these expenses depending on your income.

How much is the Child and Dependent Care Credit worth in 2019?

There are two parts to the Child Care Tax Credit. The first part tells you how much you can write off based on your filing status and number of dependents.

You can find your limit in the chart below:

Child Care Tax Credit limits 2019

Number of dependentsSingle, married filing jointly or head of householdMarried, filing separately
One$3,000Not eligible
Two or more$6,000Not eligible

The second part tells you the percentage of eligible expenses you’ll get a credit for based on your adjusted gross income. You can find your percentage in the chart below:

Amount of credit

Adjusted gross incomeCredit percentage
Up to $15,00035%
$15,001 to $17,00034%
$17,001 to $19,00033%
$19,001 to $21,00032%
$21,001 to $23,00031%
$23,001 to $25,00030%
$25,001 to $27,00029%
$27,001 to $29,00028%
$29,001 to $31,00027%
$31,001 to $33,00026%
$33,001 to $35,00025%
$35,001 to $37,00024%
$37,001 to $39,00023%
$39,001 to $41,00022%
$41,000 to $43,00021%
$43,001 or more20%

Limits

The child care tax credit has several limits, such as:

How much was the Child and Dependent Care Credit worth in previous years?

The child care tax credit hasn’t changed in the past three years.

Who qualifies for the Child and Dependent Care Credit?

You qualify for the child care tax credit as long as you:

  • Aren’t filing separate returns if you’re married.
  • File taxes using Form 1040 or 1040NR.
  • Have earned income through an employer or self-employment.
  • Care for a qualifying child or dependent.
  • Pay dependent care expenses so you and your spouse can work or look for work.
  • Make payments to a qualifying care provider who you can’t claim as a dependent.
  • Can provide the name, address and tax identification number for the care provider on your tax return.

How to calculate the Child and Dependent Care Credit

Follow these steps to calculate your child care tax credit.

  1. Add up all your qualifying dependent care expenses for the year.
  2. Calculate how much of your expenses you can claim based on your filing status and number of dependents.
  3. Calculate your adjusted gross income by subtracting 401(k) or IRA contributions and itemized deductions from your gross income.
  4. Take your adjusted gross income and use the chart above to determine what percentage of your expenses you can get credit for.
  5. Multiply your eligible dependent care expenses in Step 2 by your percentage in Step 4 to get your child care tax credit amount.

Let’s look at an example.

Mandy’s adjusted gross income is $70,000 a year. She has one qualifying child and spent $5,000 on daycare expenses. According to the charts above, she can get a 20% credit for the first $3,000 in qualifying expenses, so her credit would be $600.

If you have children, you may also qualify for these credits:

  • Earned Income Tax Credit. If your income is below $56,000, you could receive a credit worth up to $6,660.
  • Child Tax Credit. If you have children under age 17, you could receive a credit worth up to $2,000 for each child.

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Bottom line

If you qualify for the Child and Dependent Care Credit, you could receive a credit worth up to $600 for one dependent or $700 for two or more. There are strict qualifications, but you shouldn’t let that stop you from claiming it if you qualify. Be sure to have your care provider’s taxpayer identification number on hand when you’re ready to file taxes.

If you’re looking to breeze through this tax season, consider hiring a professional or compare top-rated online services that can do most of the legwork for you.

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