Filing for taxes and determining tax refunds can be difficult to navigate. Here’s how to qualify for child care tax credit in 2021.
In order to qualify for the child care tax credit in 2021, filers must fall below a certain threshold of their modified adjusted gross income depending on their filing status. In addition to the income threshold, filers must meet additional requirements.
Child Care Tax Credit
The child care tax credit is a refundable tax credit for parents or guardians of qualifying children. The tax credit allows filers to minimize their tax bill and occasionally reduce the bill enough to generate a tax refund check for leftover tax credit.
The American Rescue Plan offers up to a $3,000 tax credit for each child under the age of 17 on December 31, 2021. The credit increases to $3,600 for children that are under the age of 6 on December 31, 2021.
Qualification Requirements for Child Care Tax Credit in 2021
In order to be eligible for the credit, filers must have a modified adjusted gross income below a certain threshold depending on filing status.
- For couples filing jointly, modified adjusted gross income must be below $150,000.
- For single filers, modified adjusted gross income must be below $75,000.
- For head of household filers, modified adjusted gross income must be below $112,500.
In addition to modified adjusted gross income threshold, filers must meet the following requirements:
- The parent or guardian must have provided at least half of the child’s support for the past year
- The child must have lived with the filing parent or guardian for at least half the past year
- The child cannot file a joint tax return
- The child must be 17 or younger on December 31, 2021.
Related: How Child Support Can Affect Your Taxes in California
Related: Who Claims a Child on Taxes with 50/50 Custody in California
FAQs
What is child care tax credit?
Child care tax credit is a refundable tax credit for parents who meet certain requirements for their children. The child care tax credit offers up to $3,000 per child under the age of 17 on December 31, 2021, and up to $3,600 per child under the age of 6 on December 31, 2021. Tax credit allows filers to minimize their tax bill and occasionally provide a tax return refund.
What are the eligibility requirements for claiming Child Care Tax Credit?
In order to claim child care tax credit, filers must report a modified adjusted gross income below a certain threshold based on their filing status. That threshold is $150,000 for couples filing jointly, $112,500 for heads of household, and $75,000 for single filers. In addition to income threshold, the filer must have provided at least half of the child’s support in the past year, the child must have lived with the filer for at least half the past year, the child is not filing a joint tax return, and the child is under the age of 17 on December 31, 2021.
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If you or a loved one needs more information on qualifying for the Child Care Tax Credit in 2021, contact us. Get your free consultation with one of our experienced family law attorneys today!