As Americans prepare their 2021 tax returns for the IRS, many are looking for the expanded tax credits under the American Rescue Plan.
One tax credit that many have their eye on is the Child and Dependent Care Tax Credit.
If you’re eligible, you could see as much as $8,000.
This is a refundable credit and can increase your tax refund by thousands.
The credit is to help working families offset the rising costs of raising a child in America.
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IRS’ Child and Dependent Care Tax Credit explained
Parents who are caring for a child or another dependent while they work, look for work, or finish school are usually eligible for this credit.
The child must be under the age of 13 and living with you.
The dependent can be any age that’s lived with you for over 6 months and has a disability where they can’t care for themselves.
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The IRS defines disability as someone who can’t dress, clean, or feed themselves due to a mental or physical disability.
In order to claim this credit you need to fill out Form 2441 and file it with your tax return.
You also need a valid taxpayer identification number for qualifying individuals.
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