Dependent Care Credit

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.

BREAKING DOWN '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.

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