Federal Tax Credits


smiling boyFederal tax credits may help families offset the cost of child care. Some families may pay less in taxes and some families may receive a refund for child care paid during the most recent tax year.

On this page:

Federal Child Tax Credit


Program description:

The Child Tax Credit allows families to reduce their federal taxes by claiming a tax credit for up to $1,000 for each qualifying child. A qualifying child is:

To claim the credit:

File a federal income tax return form 1040 or 1040A (not EZ), or file a form 2441 with your form 1040.
Download tax forms and preparation worksheets
Read Ten Facts about Claiming the Child Tax Credit

Additional details:

The credit is limited if your adjusted gross income is above a certain amount. Depending on your tax filing status, a phase out may begin at:

Federal Child and Dependent Care Tax Credit


Program description:

The Child and Dependent Care Tax Credit (DCTC) is available to parents who, in order to work or to look for work, pay for child care services for children under age 13.

Families may be able to reduce their federal income tax by claiming this credit on their tax returns. The credit is a percentage, based on adjusted gross income, of the amount of work-related child and dependent care expenses paid to a care provider. The credit can range from 20 to 35 percent of a family's qualifying expenses, depending upon income.

To claim the credit:

File a federal income tax return form 1040 or 1040A (not EZ), or file a form 8812 "Additional Child Tax Credit." To
Download tax forms
Read Topic 602 Child and Dependent Care Credit

Additional details:

Earned Income Tax Credit


Program description:

The Earned Income Tax Credit (EITC) is a federal tax credit for working families with low incomes. Even when families do not owe federal taxes they may qualify but they must file a tax return to receive this credit.

To claim the credit:

Determine your eligibility on the site: Earned Income Tax Credit – Should I Claim It?
Download tax forms
See the Internal Revenue Service EITC web site.

Additional details:

For 2010, families can receive up to $3,043 for one qualifying child, or up to $5028 for two, or $5657 for three or more. qualifying children. A qualifying child must be under 19 years old.

Families cannot claim credit for money already set aside in a pre-tax flexible spending (DCAP) account, but MAY claim credit for any additional child care costs not included in the DCAP amount.

To receive the EITC, family income for 2010 must be less than:

For more information: