The short answer
If you pay for care for a child under 13 (or a spouse or dependent who cannot care for themselves) so that you can work or look for work, you may be able to claim the Child and Dependent Care Credit on Form 2441. The credit is a percentage of up to $3,000 of care expenses for one qualifying person, or $6,000 for two or more.
- 2025: the percentage is 35% at lower incomes and drops to 20% once adjusted gross income (AGI) is over $43,000.
- 2026: the maximum percentage rises to 50% (confirmed by the IRS). Under the draft 2026 Form 2441 instructions, the higher percentages also extend to much higher incomes, and the rate still bottoms out at 20%.
- The credit is nonrefundable: it can reduce your tax to zero, but not create a refund.
Who qualifies
- Qualifying person: your qualifying child under age 13 whom you can claim as a dependent; your spouse who is physically or mentally unable to care for themselves and lived with you more than half the year; or a person unable to care for themselves who lived with you more than half the year and whom you could claim as a dependent (or could except that their gross income was $5,200 or more for 2025, or $5,300 or more for 2026).
- Work-related: the care must allow you (and your spouse, if married) to work or look for work.
- Earned income: your expenses cannot be more than your earned income — or, if married, the smaller of your and your spouse's earned income. A spouse who is a full-time student or unable to care for themselves is treated as earning $250 a month ($500 with two or more qualifying persons).
- Filing status: single, head of household, qualifying surviving spouse, or married filing jointly. Married people generally must file jointly.
- Provider: not your spouse, the child's parent, a person you can claim as a dependent, or your child who is under 19 at the end of the year. You must report the provider's name, address, and taxpayer identification number (you can use Form W-10 to request it).
What expenses count
| Generally qualifies | Generally does not qualify |
|---|---|
| Day care, babysitters, and nannies | Kindergarten or higher-grade tuition |
| Preschool or nursery school below kindergarten | Overnight camp |
| Before- and after-school care | Summer school and tutoring programs |
| Day camp, including specialty day camps | Food, clothing, education, or entertainment costs |
| Household services partly for the qualifying person's care | Chauffeurs, bartenders, or gardeners; child support payments |
The credit rate: 2025 vs. 2026
| Adjusted gross income | 2025 (all filing statuses) | 2026 (draft schedule) |
|---|---|---|
| $15,000 or less | 35% | 50% |
| Over $15,000 | Drops 1 point for each $2,000 (or part) | Drops 1 point for each $2,000 (or part), down to 35% at over $43,000 |
| Over $43,000 | 20% | 35% until $150,000 (married filing jointly) or $75,000 (other filers) |
| Higher incomes | 20% | Drops 1 point for each $4,000 (joint) or $2,000 (other filers) above those levels |
| Minimum rate | 20% (AGI over $43,000) | 20% (AGI over $206,000 joint, or over $103,000 other filers) |
The 50% maximum and the unchanged $3,000 / $6,000 expense limits for 2026 are confirmed on the IRS Working Families Tax Cuts page. The step-by-step 2026 schedule above comes from the draft 2026 Form 2441 instructions (August 2026) and may change in the final version. For 2026, the draft Form 2441 tells you to look up your percentage in the instructions instead of printing a table on the form.
Dependent care FSAs and employer benefits
| 2025 | 2026 | |
|---|---|---|
| Maximum employer dependent care benefits you can exclude from income | $5,000 ($2,500 married filing separately) | $7,500 ($3,750 married filing separately) |
Benefits you exclude through an employer dependent care assistance program (often a dependent care FSA) reduce the $3,000 or $6,000 limit for the credit. For 2026, the draft Form 2441 instructions note that the $7,500 limit applies only if your employer's plan allows it; if the plan still allows $5,000, use $5,000. If you exclude the full $7,500, you generally cannot claim the credit for 2026 expenses, because $7,500 is more than either limit.
Examples (illustrative)
2025 — two children: Lin and David file jointly with AGI of $100,000 and pay $8,000 for after-school care for two children under 13. Their expense limit is $6,000 and their rate is 20%, so their credit is $1,200 (if they have at least that much tax).
Same family in 2026: with AGI of $100,000 on a joint return, the draft 2026 schedule gives a 35% rate. Their credit would be $6,000 × 35% = $2,100.
Higher income in 2026: a married couple filing jointly with AGI of $250,000 and the same expenses is above $206,000, so under the draft 2026 schedule the rate is 20% and the credit is $1,200 — the same as in 2025.
FSA plus the credit (2026): a single parent with two children under 13 excludes $5,000 through a dependent care FSA and pays $10,000 of care. The $6,000 limit is reduced by the $5,000, so only $1,000 of expenses can be used for the credit.
Low income: a head-of-household parent with AGI of $14,000 in 2025 would have a 35% rate, but if the standard deduction reduces taxable income to zero, there is no tax for this nonrefundable credit to reduce.
Common misconceptions
- "It's the same as the Child Tax Credit." They are separate credits with different rules; you may qualify for both.
- "I get a refund even if I owe no tax." This credit is nonrefundable.
- "School tuition counts." Kindergarten and higher-grade tuition do not count as care expenses.
- "I can use my FSA money and the full credit." Excluded benefits reduce the expense limit for the credit.
- "The 50% rate applied to 2025." The higher rates start in 2026; 2025 uses the 35%-to-20% schedule.
The 50% maximum rate, the $7,500 exclusion, and the $5,300 gross income amount for 2026 are confirmed in final IRS sources (the Working Families Tax Cuts page, Publication 15-B, and Revenue Procedure 2025-32). The detailed 2026 rate schedule is from draft Form 2441 instructions and may change. State credits are not covered here.