Various stimulus programs have been created under the American Rescue Act to help struggling Americans.
One of the measures allows parents to claim up to $8,000 more dollars on their taxes in 2022.
This is thanks to the child and dependent care tax credit that helps offset the costs of raising a child or caring for a dependent.
Related: Do you have kids? You could see a surprise $8,000 payment in 2022
Who is eligible for the child and dependent care tax credit?
Eligibility depends on your income and how much you spend to care for your child when you’re working or in school.
If you make over $438,000 you are automatically ineligible.
The amount you get is calculated using your income plus a percentage of the expenses you have to pay for the child to be cared for as you work or attend school.
Related: 4 ways that Americans aren’t taking advantage of thousands in stimulus payments or free cash
Up to $8,000 per child can be claimed for 2021.
Families with an income under $125,000 could claim 50% of their qualifying expenses for children under 13. They may claim up to $8,000 for a single child.
Families may also claim 50% of qualifying expenses up to $16,000 for two children under 13.
The same claims can be made for caregiving for a dependent.
Related: $1,000 stimulus checks go out next week, is one yours?
Families making between $125,000 and $183,000 can also qualify, but may only claim up to 20%.
The claim in refundable. You do not need to owe taxes to get the credit and can get a refund if possible.
To claim, you need to file a Form 2441 that outlines your child care expenses. This will be filed with your 2021 tax return.
You may need to provide proof of these expenses.
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