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A tax credit is even more valuable to families than a tax deduction! It’s a dollar-for-dollar reduction in the taxes you owe. Some credits are refundable—reducing taxes otherwise owed to zero and paying a refund.
NEW federal tax benefits:
The American Rescue Plan Act of 2021 enhanced the benefits of families with children and child care specifically. The details of the new benefits can be hard to understand, so we’re here to break it down.
Under current federal law, eligible families can claim 2021 child care tax credits up to the following maximum amounts:
- $2,000 per qualifying dependent under the age of 17. The credit is partially refundable. Some taxpayers may be eligible for a refund of up to $1,500 per child. The credit amount decreases if your modified adjusted gross income exceeds $400,000 (married filing joint) and $200,000 (all other filers).
There are rules for these federal tax credits, so please speak to your tax advisor about how they apply to your family. In the meantime, this child care tax credits calculator is a quick tool for a broad estimate.
State tax benefits:
If your family needs help with tuition, there are state and local agencies to provide tuition subsidies. This map is a great starting point for finding the financial assistance resources available.
More and more employers add child care benefits to their employee compensation packages because it’s hard to do your job without reliable child care!
Talk with your employer or your HR department about whether they offer child care benefits and how to use them.
Families involved in the U.S. Military, Law Enforcement, EMT, Paramedics, and Firefighters may be eligible for child care discount. Call us to see if you qualify.
More and more employers add child care benefits to their employee compensation packages because it’s hard to do your job without reliable child care! Talk with your employer or your HR department about whether they offer child care benefits and how to use them.
As part of our team, you may be eligible for other discounts or tuition credits. Talk with your supervisor about what’s currently available to you.