The federal Child and Dependent Care Credit is a tax credit that offsets part of what you spend on childcare so you can work. For the 2025 tax year, per the IRS, it covers 20 to 35 percent of up to $3,000 in care costs for one child, or up to $6,000 for two or more.
Sources used: Internal Revenue Service (IRS), Topic No. 602 and Form 2441 instructions, 2025 tax year; IRS Publication 503, Child and Dependent Care Expenses, 2025; Office of Child Care, Administration for Children and Families (ACF), family affordability briefs 2024. This is general information, not tax advice; confirm your situation with the IRS or a tax professional.
What is the Child and Dependent Care Credit?
The federal Child and Dependent Care Credit is a nonrefundable tax credit that reimburses part of the money you pay for care of a child under age 13, or a dependent or spouse who cannot care for themselves, so that you can work or look for work. It is claimed on IRS Form 2441 with your annual return. Unlike a deduction, which lowers the income you are taxed on, a credit lowers your tax bill directly, dollar for dollar, up to the limits set by the IRS.
- Qualifying person
- A child under 13 when the care was provided, or a dependent or spouse physically or mentally unable to care for themselves.
- Work-related expense
- Care you paid for so you, and your spouse if married, could work or actively look for work.
- Nonrefundable
- The credit can reduce your tax to zero but, for 2025, does not pay you anything beyond that, per the IRS.
How much is the credit worth?
The credit is worth 20 to 35 percent of your eligible care expenses, and the percentage falls as income rises. Per the IRS for the 2025 tax year, you can count up to $3,000 of expenses for one qualifying person or up to $6,000 for two or more. Families with adjusted gross income of $15,000 or less use the top 35 percent rate; the rate drops by one point for every $2,000 of additional income until it reaches a floor of 20 percent for incomes above $43,000.
| Qualifying children | Max expenses counted | Credit at 20%–35% |
|---|
| One child | $3,000 | $600 – $1,050 |
| Two or more children | $6,000 | $1,200 – $2,100 |
Source: IRS Topic No. 602 and Form 2441 instructions, 2025 tax year. Most families above $43,000 in adjusted gross income receive the 20 percent rate.
Who qualifies, and how do you claim it?
You generally qualify if you paid for care so you could work and you, and your spouse if filing jointly, both had earned income during the year, per IRS Publication 503 for 2025. You must identify the care provider by name and taxpayer ID on Form 2441, which means a licensed daycare, family child care home, or nanny who reports income, not an off-the-books arrangement. Care from your spouse, the child's parent, or your own dependent does not count.
To claim it, file Form 2441 with your Form 1040 and report what you paid each eligible provider. Keep receipts and the provider's tax identification number. If your employer offers a Dependent Care FSA, coordinate the two carefully, because dollars run through the FSA reduce the expenses you can apply to this credit.
Honest tradeoff. This credit helps, but it rarely covers much of the bill. With many families paying $12,000 to $24,000 a year for full-time care, per Office of Child Care affordability data from 2024, a maximum credit of $600 to $2,100 offsets only a slice. It is real money worth claiming, but it is not a solution to childcare costs on its own.
How does it differ from the Child Tax Credit?
These two are easy to confuse but separate. The Child and Dependent Care Credit, covered here, is tied to money you spend on care so you can work. The Child Tax Credit is a broader per-child credit that does not depend on childcare expenses at all, per the IRS. You can claim both in the same year if you qualify for each. A Dependent Care FSA is a third, separate tool that uses pre-tax payroll dollars.
For the related options, see our guides to what a Dependent Care FSA is and what a daycare subsidy is. To plan the overall budget, start with our daycare cost guide, run the numbers in our cost calculator, or step back to the how to choose a daycare pillar.