How Much Money Do You Get Back Out of Your Child Care Expenses on Your Taxes?

by W D Adkins, Demand Media
    You can get a tax credit for child care costs.

    You can get a tax credit for child care costs.

    Child care costs can be a big drain on a family’s budget. The Center for American Progress notes that in 2010 fewer than 30 percent of children had a stay-at-home parent, compared with more than half in 1975. Although child care expenses aren't tax-deductible, you can recoup some of some of the costs if you qualify for the Child and Dependent Care Credit.

    Child and Dependent Care Credit

    The Child and Dependent Care Credit can give you up to $1,050 back on your taxes for one qualifying child and up to $2,100 for two or more children. As with all tax credits, this amount is subtracted directly from your tax bill. The credit may be claimed only for child care expenses that you pay in order to go to work or look for a job. If you are married and file a joint return, both spouses must have earned income. The income requirement is waived if you or your spouse is a full-time student for five months or more during the year or if one spouse is incapacitated

    Eligibility

    In order to claim a child and get money for child care back on your taxes, the child must be under age 13 at the time the expenses are paid. The age rule is waived for children who are medically incapable of self-care. The child may be your child, a stepchild, adopted child, foster child or sibling. Descendents of any of these also qualify if they meet the other requirements.

    Limits

    When you claim the Child and Dependent Care Credit, you get back a percentage of the child care expenses you claim. The maximum amount you can claim is $3,000 for one child and $6,000 for two or more children. You cannot claim child care expenses paid by your employer. In addition, if employer-paid child care expenses are excluded from your income, the amount your employer paid is subtracted from the dollar limit you can claim. For example, if you have one child and could claim the maximum -- $3,000 -- but your employer paid $1,200, the amount you can claim is reduced to $1,800.

    Amount of Credit

    The amount of your credit for child care is 35 percent of the dollar amount of expenses you can claim if your adjusted gross income is under $15,000. This percentage is gradually reduced as your income goes up. When your income is $43,000 or more, the percentage is 20 percent. For example, if you can claim $3000 and your income is $14,000, you can get the entire 35 percent as a credit, which comes to $1,050.

    About the Author

    Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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