Share

IN ADDITION to the child tax credit expanded under the Biden administration, families can now also claim child care expenses in tax credits up to $16,000 for 2021.

For eligible families and individuals under income requirements, up to 50 percent of childcare-related expenses can be claimed. 

GettyFamilies can claim child care expenses in tax credits up to $16,000[/caption]

GettyIt covers most child care expenses[/caption]

The expenses max out at $8,000 for one child and $16,000 for two or more children. Previously, the maximum amount you could claim for multiple children before was $6,000.

These child care expenses include everything from daycare to after-school programs to nannies to day camp and more.

This credit is another part of the American Rescue Plan, passed in March, and can start being claimed for this tax year — so, in 2022.

For instance, if you regularly use a babysitter in 2021, you’ll be able to claim that as a child care expense for this tax year when tax filing time comes around in 2022.

GettyThe credit is part of the American Rescue Plan, passed in March[/caption]

CNET points out that you’ll likely have an easier time claiming child care credits for people and groups working in an official capacity, such as a summer camp program or licensed daycare provider, rather than a local teen. But other than that, the credit is somewhat flexible. 

Day care before school at a city site? That counts. Your teenager watching your younger kids for a little extra allowance money? Not so much.

It’s also not a good idea to try to claim anything that you’re paying off the books, since that income may not be claimed by the person you’re paying. 

The expenses won’t be claimed in taxes until next year, but record-keeping throughout 2021 to be prepared is your best bet. 

GettyParents can claim the credits in 2022 for the 2021 tax year[/caption]

All you’ll need to to do claim the expenses for this year is fill out Form 2441 and attach it to your Form 1040 tax return when you file in 2022.

Some tax software will have the child and dependent care credit form already built-in, and individual or other tax providers should know what to do with the information, too.

To get the child and dependent care tax credit, the filer’s adjusted gross income needs to be less than $125,000. Any more than that and the credits will phase out at 50 percent.

Getty – ContributorThe claims are in addition to the 2021 child tax credit, which expanded payments to $3,600 each year for children under 6 and $3,000 for those aged 6 to 17[/caption]

Families earning $438,000 or more will be out of luck, since that’s when the credit phases out entirely.

Dependents just need to be under the age of 13 or unable to care for themselves if they are 13 or older in order for the filer to qualify to claim the credit.

Again, this is all on top of the 2021 child tax credit, which expanded payments to $3,600 each year for children under 6 and $3,000 for those who are older up until age 17.


President Biden’s $1.9 trillion coronavirus relief package expanded the child tax credit for one year, and the monthly payouts will continue through December.

Families will start receiving their first payment for that credit on July 15.

An estimated 88 percent of children are set to receive them, according to the Associated Press.

Authors