The Child and Dependent Care Credit (for 2022 and forward)

The Child and Dependent Care Credit returns to its original pre-2021 rules for 2022, which for most taxpayers will mean a far less generous credit.
The Child and Dependent Care Credit is a non-refundable credit of up to $1,050 for qualifying child care expenses for up to two children. This video goes into what expenses qualify for the credit and how to claim the credit on your tax return.
0:00 Introduction
0:40 What the Credit is, and Who Qualifies for the Credit
3:45 How to claim the credit
5:32 Coordinating the Credit with the Child Tax Credit
6:12 Employer Dependent Care Benefits
6:50 Conclusion
This video describes the Credit using the rules in place prior to 2021, and from 2022 onward. If you're preparing a 2021 return, click here: • Do you Qualify for the...
Additional Resources and Information:
IRS Form 2441: "Child and Dependent Care Credit": www.irs.gov/pub/irs-pdf/f2441...
Instructions for Form 2441: www.irs.gov/pub/irs-pdf/i2441...
The images of "Nadine," "Dwayne," "Donna," and "Maddie" were generated by thispersondoesnotexist.com and any resemblance between these images and any persons, living or dead, is coincidental and not intentional.
The Tax Geek on Twitter: @taxgeekusa
The Tax Geek on Reddit: www.reddit.com/r/askataxgeek
Intro Music: "Bluesy Vibes" - Doug Maxwell - KZbin Audio Library
Outro Music: "Modern Attempt" - Track Tribe via KZbin Audio Library
DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or financial advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or financial professional.
The information in this video is current as of date of publication, and is subject to changes.

[@MrT6bill]

Wow! He gives the BEST tax videos!

[@DV-zp1ew]

Is anybody else having issues claiming this credit for clients this year??

[@TheTaxGeek]

The thing to remember first and foremost is that the credit is non-refundable this year, so if you have a client with no tax liability, the credit will not compute. For example, you have a client that files HOH with an $18,000 AGI, there will be no credit. Another issue is that the higher percentage levels of the credit have become impossible to claim for anyone except "single" taxpayers due to increases in the standard deduction.

[@imiryx9744]

@@TheTaxGeek so if they are single with a dependent AGI of 18000 will a credit commute?

[@TheTaxGeek]

If they are Head of Household (unmarried with a qualifying dependent) their AGI has to be at least $19,400 to get any benefit from the credit.

[@DesiraeJ]

Kids out of poverty for one year then oops sorry back to poverty. We the people need our power back.

[@nene49er19]

@@DesiraeJ they helped y’all enough and y’all still didn’t do the right thing with the money?

[@corygillis3658]

i wanna know where the hell these folks get daycare for 4500/yr ...

[@fromjaxflorida]

@corygillis3658 right? Some daycare charges equivalent to a college tuition.

[@ObeyLV]

Hi not sure if you would respond to this since it's a month after you posted. If I had a family member babysit my 2 kids, would that count if I use their SSN? Would I need receipts?

[@TheTaxGeek]

Yes, you can count it, BUT the sitter has to declare what you paid her as income.

[@ObeyLV]

@@TheTaxGeek what if they aren't filing for taxes? They don't work at all and didn't exceed more than 5k

[@ChrisLoewen]

I'm in California and drive 200 miles total every week dropping/picking my son off/up at daycare, can I claim the miles driven as part of the total child care expenses? How do I calculate the value of this?

[@TheTaxGeek]

I'm afraid not. To claim the Child and Dependent Care Credit, you need to pay a childcare provider.

[@kristinadube7032]

Okay, I so wanted to understand this. I am trying to complete the Student or Disabled Earned Income Adjustment portion as I paid for childcare while I was in school. I paid 2,307.50 during 2023. I was a full time student all year but now I am confused. I only made about 8k last year total, so, am I supposed to do $250x12 (being full time in college all year?) or what?! Ugh, taxes always confuses me.

[@TheTaxGeek]

If your earned income was greater than the expenses you're claiming for the Credit, it doesn't matter whether you were a full-time student or not. The $250/month "earned income equivalent allowance" is only used when you have either no earned income, or your earned income is insufficient to cover the child care expenses.

[@calvincleo]

What about if we are not married and she claims the child as a dependent on her taxes? can i use this credit as i do pay for childcare although im not claiming the child on my taxes?

[@TheTaxGeek]

Technically, neither of you can claim the Credit. You can't because you're not claiming the child as a dependent, and she can't because she didn't pay the expenses. You might want to calculate your outcome twice (one with you claiming the child, one for her claiming the child) as see which one gives the overall better result.

[@denniseescutia4]

I was told that I would only get 400 I have 2 kids and our total combine income was 125k is this right or did I get lied to? This is the first year I was going to claim daycare but this is not want I expected I figure it was going to help with not having to pay back much but it did nothing for me

[@TheTaxGeek]

It depends on how much you spent. If you spent $2,000, the credit is correct. At your income level, the credit is 20% of the amount you paid for childcare up to a maximum of $6,000 paid.

[@stefhanieross3252]

Two kids in daycare total 14k for 2022. Household income is about $140k combined, married. Would i get credit for two kids (4 and 2yrs old?)

[@TheTaxGeek]

$1,200.

[@danig064]

If you contribute the max of $5K to the dependant care FSA are you automatically excluded from getting the credit, regardless of what expenses were? Ex. Someone with $20k of daycare expense for 1 dependent and contributed $5K to FSA = no credit? I had thought that $15K of expenses ($20k (daycare expense) less $5K (dependent care FSA) would still be eligible towards credit but the form isn't calculating it that way.

[@TheTaxGeek]

Your credit is limited to $3K with one qualifying child, or $6K with two qualifying children. With only one qualifying child, $5K in dependent care benefits exceeds the maximum expenses allowed, and you would get no credit. If you had two qualifying children (even if only one was in daycare) you would have eligible expenses of $6K. Those maximum expenses would be offset by the Dependent Care Benefits, giving you $1K in expenses eligible for the credit.

[@persiajones]

I have this same issue and I have 4 eligible children. I paid 642 for the Fsa and didn’t even use it and the credit isn’t populating for me.

[@roe2123]

What if our nannie commutes from Mexico and does not have a SSN?

[@TheTaxGeek]

To claim the Credit, your child care provider has to have a Social Security Number or Employer Identification Number.

[@jeffreybowling5852]

What if the joint filling is over the 100K? What is the %?

[@TheTaxGeek]

The Credit percentage for all AGIs over $43,000 is 20%. This is one of the few credits where there is no upper AGI limit.

[@miraclelove991]

Only 15 states provide a refundable credit? Is this true.

[@TheTaxGeek]

Based on my cursory research, of the 42 states that have a personal income tax 26 have some sort of child and dependent care credit and of those 10 have credits that are refundable.

[@JAcosta915210]

Good grief. We spent nearly 10k on daycare for a 2 year old 3 days a week. That 20% is not enough.

[@TheTaxGeek]

In response to this (and the prior) comment, you won't get any argument from me that the Child Care Credit needs to be overhauled. The highest credit percentage (35%) cannot be claimed unless you file as Single (which makes that tier more or less pointless). But, as I stated in the video, if you have more than one child under 13 (even if that child isn't in daycare) you can claim the maximum $6,000 towards the credit.

[@mariabelenveintimilla1784]

I'm married make 108k a combined(full time) , have a 4 year old , paid 9k in preschool Only getting $600 . I don't get what I'm doing wrong this is the first year I can't get anything over 2k

[@TheTaxGeek]

With one eligible child, the maximum expenses you can use for the credit is $3K. At your income level, the credit is 20% of the eligible expenses. 20% of $3K is $600. If you had an additional eligible (under age 14) child, the maximum expenses increase to $6K, even if the other child has no expenses.

[@mariabelenveintimilla1784]

@The Tax Geek thank you for the clarification , much appreciate it .

[@DaniiMarie333]

Democrats

[@kimberlieracal08]

Hello po filipino po ba kayo maam mariabelen? Just want to i ask po regarding those po dependent care credit

[@classytwotimes3275]

Can anybody tell my what would be reasons one can get the dependent care tax? I did my tax calculator on ta software as a estimate what I may get but it says I don't qualify for a dependent care tax but I have one child age 3 and pays a baby sitter so I dont get that I dont qualify? Is it a form from the irs site that parents need ?!

[@TheTaxGeek]

As it currently stands, the Child and Dependent Care Credit is a non-refundable credit. That means you must have some tax liability to claim it. If for example, your income was only $18,000 and you're claiming HOH, you have zero taxable income, and thus zero tax liability and would not benefit from the credit. If you pay a baby sitter, you must put his or her Social Security number on the form 2441, and the IRS will be expecting that income to be reported on the sitter's tax return.

[@classytwotimes3275]

@@TheTaxGeek Thank you but what about using turbo tax it says i dont qualify for th dependents credit and the site didnt offer a form eithrr to claim that credit...which is why im confused!

[@christinag7338]

@@TheTaxGeek what if the baby sitter is 16???

[@raze2400]

Paid over $18k for childCare and only getting $600 back smh

[@Tokentekken]

Hi! I’m in Ohio. Married filing joint with 1 child in daycare age 4. We spent 1,973. Total income is 60k. Do we qualify for this? And if so how much could we get back?

[@TheTaxGeek]

Yes, you would qualify. The Credit would be about $395.