Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Credit for Child and Dependent Care Expenses

Determining the Amount of the Credit

Limits to the Credit

The taxpayer's child and dependent care expenses are subject to an earned income limit. The amount of work-related expenses used to figure the credit cannot be more than:

  • The taxpayer's earned income for the year, or
  • The smaller of the taxpayer's or the spouse's earned income for the year, if Married Filing Jointly

In addition to the earned income limit, there is a dollar limit on the amount of work-related expenses that can be used to figure the credit. This limit is $3,000 for one qualifying person or $6,000 for two or more qualifying persons. If the taxpayer received dependent care benefits from an employer, the amount of the benefits excluded from income must be subtracted from the dollar limit.

Example

Mary has three qualifying children. She received $4,800 in dependent care benefits through her employer. When Mary figures her credit, her work-related expenses will be limited to $1,200 ($6,000 - $4,800).

Collage: Form 2441 showing expenses limit and Form 1040 showing AGI.