The Child and Dependent Care Tax Credit (CDCTC), administered by the IRS, allows taxpayers to claim a credit for a portion of the expenses they incur for the care of qualifying children younger than age 13 or dependents who are unable to care for themselves. Eligibility generally requires that the care subsidy enables the taxpayer to work or look for work, with income limits affecting the credit amount.
In 2022, 25 states (Arkansas, California, Colorado, Delaware, Georgia, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Nebraska, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, and Vermont) and the District of Columbia provided some form of their own CDCTC.
More information about the CDCTC
- IRS’s CDCTC website: https://www.irs.gov/credits-deductions/individuals/child-and-dependent-care-credit-information
- The National Conference of State Legislature’s overview of federal and state CDCTCs: https://www.ncsl.org/fiscal/child-and-dependent-care-tax-credit-overview