Child and Dependent Care Tax Credit (CDCTC)¶
A federal tax credit designed to help parents and caregivers cover the costs of caring for a qualifying child or a disabled dependent, enabling the taxpayer to work or look for work.
The credit is a percentage (20% to 35% based on adjusted gross income) of work-related expenses paid for the care of a qualifying person. The maximum amount of expenses that can be used to calculate the credit is $3,000 for one qualifying person and $6,000 for two or more qualifying persons. The credit is non-refundable, meaning it can reduce tax liability to zero but any excess is not refunded.