IRS: Am I eligible for this $8,000 tax credit?

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.

The credit has been increased for 2021 and lets parents write off up to $8,000 for one child. They may also writ off up to $16,000 for two or more this year.

They would be able to claim half the amount, receiving as much as $4,000 to $8,000 in their tax refund.

Free tax filing options with the IRS

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.

Tax Refund: Dates the IRS will send your refund

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.