Dependent Care Credit

AAA

DEFINITION of 'Dependent Care Credit'

A nonrefundable tax credit offered to taxpayers who pay out-of-pocket expenses for child care. The dependent care credit is intended to aid lower income working taxpayers with the cost of child care. One of the main criteria to qualify for the credit is that the care must have been provided to a qualifying child under the age of 13.

INVESTOPEDIA EXPLAINS 'Dependent Care Credit'

The dependent care credit is claimed on Form 2441. There are several criteria that must be met in order to qualify for the credit, including income threshold and qualifying child guidelines. For more information on this credit, see IRS Publication 503.

RELATED TERMS
  1. Dependent Care Flexible Spending ...

    A flexible spending account (FSA) designed to provide tax-exempt ...
  2. Child Tax Credit

    A credit given to taxpayers for each dependent child that is ...
  3. Dependent

    An individual whom a taxpayer can claim for credits and/or exemptions. ...
  4. Additional Child Tax Credit

    A refundable credit that can be claimed by taxpayers who are ...
  5. Non-Refundable Tax Credit

    A tax credit that can't reduce the amount of tax owed to less ...
  6. Zero Percent

    A promotional rate of interest used to entice consumers, often ...
RELATED FAQS
  1. How can I use a child tax credit?

    You may be able to reduce the amount of taxes you owe by up to $4,000, by claiming the child tax credit of up to $1,000 ... Read Full Answer >>
Related Articles
  1. Taxes

    Taxing Times For Divorced Parents

    Find out how to deal with the tax issues that arise for divorced parents with dependent children.
  2. Taxes

    Give Your Taxes Some Credit

    A few tax credits can greatly increase the amount of money you get back on your return.
  3. Budgeting

    Kids Or Cash: The Modern Marriage Dilemma

    It now costs nearly $300,000 to raise a child for 18 years. Are you sure you're up for it?
  4. Taxes

    What To Do If You Lost Your W-2

    There's no need to panic if you don't have your Form W-2 to file taxes, there are easy ways to gain access to the missing form or file without it.
  5. Taxes

    Will Itemized Deductions Get You A Bigger Refund?

    April and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.
  6. Taxes

    The First Thing You Should Do With Your Tax Refund

    Nobody likes to pay taxes, but everyone loves to get a tax refund. When the check arrives in the mail, it's hard to resist spending it on some indulgence.
  7. Taxes

    How Does An IRS Audit Work?

    It doesn't automatically mean an IRS agent will be ringing your doorbell. Here are the different types of IRS audits and how to handle them.
  8. Investing

    Why Are Consumers In Hesitation?

    Diverging monetary policy globally and a stronger dollar continued to be key drivers of the recent underperformance and last week’s tumble in U.S. stocks.
  9. Stock Analysis

    The Key to McDonald's? 70 Million Customers a Day

    Even when it has an underperforming year, McDonald’s is still one of the most profitable companies around.
  10. Chart Advisor

    Why Now is the Time for Food and Beverage Stocks

    As volatility rears its ugly head, it's natural to investigate stable sectors such as food and beverages. Here's an appropriately-named ETF to consider.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center