The IRS is offering parents a tax credit that would cover up to 50% of child care expenses, and it could be worth as much as $8,000.
Parents who care for children and other dependents are the ones the credit is designed for.
They would be able to claim half the amount, receiving as much as $4,000 to $8,000 in their tax refund.
How to apply for the child and dependent care tax credit
To claim the credit, you’ll fill out Form 2441: Child and Dependent Care Expenses and hand it in with your tax return.
You’ll need to identify who you take care of and provide names, addresses, and SSNs of the child or dependent you care for.
Eligibility for this tax credit from the IRS
Families with an income of $125,000 are eligible to claim up to half of $8,000 for one child’s care.
You’ll get it in the form of a refund or it will lower your tax bill.
If you make more than $125,000 then it will begin to phase out.
Once you reach $183,000 it drops what you can claim by 20%.
Once you surpass $438,000, you cannot claim the credit.