What is Child and dependent care credit?
In short
The child and dependent care credit is a nonrefundable credit for care costs that let the taxpayer (and spouse) work or look for work. For 2025 it is 20% to 35% of up to $3,000 of expenses for one qualifying person or $6,000 for two or more.
Key takeaways
- Qualifying persons are children under 13 and a dependent or spouse unable to care for themselves.
- Expenses can't exceed the lower earned income of the two spouses.
- From 2026 the One Big Beautiful Bill Act raises the top credit rate to 50%, phasing down as income rises.
Where it's tested
REG: Filing Status, Credits & Alternative Minimum Tax — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An unmarried taxpayer pays more than half the cost of maintaining a separate household that is the principal residence of the taxpayer's dependent mother. The mother does not live with the taxpayer. What filing status may the taxpayer use?