Child tax credits have been a lifeline for families throughout the country, but there’s another benefit some families are overlooking.
There are also child and dependent care tax credits to help families pay for the cost of working and providing for a child.
The credit may also be used for families that care for a dependent with a disability.
These credits were originally $6,000 for two or more children, but the American Rescue Act has changed this.
New and improved child care credits
Now one child can be claimed for child care expenses up to $8,000, and multiple children up to $16,000.
These can be used for children under 13 or dependents that are unable to care for themselves.
The limit for wages and being able to claim the credit has also been increased to $125,000. The number goes down after that, and once an AGI hits $438,000, you cannot claim care credits.
These can be claimed in 2022 when families file their taxes for 2021.
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