Calculate Your Child and Dependent Care Credit
The Child and Dependent Care Credit helps working families offset the cost of childcare. For 2025, you can claim up to $3,000 in expenses for one qualifying person or $6,000 for two or more, with credit rates ranging from 20% to 35% based on your income.
- Maximum eligible expenses: $3,000 (1 person) or $6,000 (2+ persons)
- Credit percentage: 20-35% based on AGI
- Non-refundable credit (reduces tax liability to zero)
- Covers daycare, after-school care, day camps, and more
Enter your filing status, income, care expenses, and earned income to calculate your estimated credit. The credit percentage decreases as income increases, starting at 35% for AGI up to $15,000 and reaching 20% for AGI over $43,000.
Frequently Asked Questions About the Care Credit
What qualifies as dependent care for this credit?
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Dependent care includes care for children under age 13, a spouse who is physically or mentally incapable of self-care, or any dependent who is physically or mentally incapable of self-care and lives with you for more than half the year. The care must be necessary so you (and your spouse if married) can work or look for work. Both spouses must have earned income, unless one is a full-time student or disabled.
What expenses are eligible for the Child and Dependent Care Credit?
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Eligible expenses include daycare centers, babysitters, nannies, au pairs, after-school programs, day camp, and in-home care providers. Expenses that are NOT eligible include: overnight camps, schooling for children in kindergarten or higher grades (tuition), food, clothing, entertainment, and payments to your spouse, the child's other parent, or someone you claim as a dependent.
Can I use this credit with a Dependent Care FSA?
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Yes, but you cannot double-dip. If you contribute to a Dependent Care FSA (up to $5,000), those expenses cannot also be claimed for the credit. You must subtract FSA contributions from your total care expenses before calculating the credit. For some families, using both strategically can maximize total tax savings, depending on your tax bracket and total care expenses.
How is the credit percentage determined?
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The credit percentage starts at 35% for AGI up to $15,000 and decreases by 1% for each $2,000 of AGI above $15,000, until it reaches 20% for AGI over $43,000. For example, if your AGI is $25,000, you would be $10,000 over the $15,000 threshold, which equals 5 steps of $2,000, reducing your rate by 5% to 30%.
Is the Child and Dependent Care Credit refundable?
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No, for 2025 the Child and Dependent Care Credit is non-refundable. This means it can reduce your tax liability to zero, but you cannot receive any excess credit as a refund. If your tax liability is less than your calculated credit, you will only receive credit up to your tax liability amount. The temporarily expanded refundable credit from 2021 has expired.
What is the maximum credit for 2025?
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For 2025, the maximum credit is $1,050 for one qualifying person (35% of $3,000) or $2,100 for two or more qualifying persons (35% of $6,000). However, the 35% rate only applies if your AGI is $15,000 or less. Most families with higher incomes will receive a credit between 20-30% of their eligible expenses, resulting in maximum credits of $600-$900 for one person or $1,200-$1,800 for two or more.
