Child & Dependent Care Tax Credit
Overview
The Child and Dependent Care Tax Credit (CDCTC) is the only provision of the tax code specifically created to help working parents pay for child care.
The CDCTC helps millions of working families cover a portion of their child care costs. Parents can claim a percentage of child care expenses to help cover the cost of care for children under the age of 13 or adult dependents. In 2022, more than 5.7 million families nationwide benefitted from this important tax benefit.
In July 2025, the Child and Dependent Care Tax Credit (CDCTC) was permanently expanded for the first time since 2001. Under the new law, families with the lowest incomes are now eligible to receive up to 50% of their child care expenses back as a tax credit. This expansion is expected to benefit four million families, reducing their taxable income by an average of $2,100 — a $900 increase from the previous credit.
Top
Resources
Child and Dependent Care Tax Credit (CDCTC): Overview
With the average annual cost exceeding $13,000 per child, millions of American families struggle to afford quality child care. The Child and Dependent Care Tax Credit (CDCTC) provides some financial …
The First Five Things To Know About: The Federal Tax Code and Child Care
Child care is not a luxury for American families – it’s a necessity. Yet the high costs associated with quality child care are rapidly outpacing most other expenses, including the …
Child and Dependent Care Tax Credit (CDCTC): Maximum Credit Amounts for Families
The Child and Dependent Care Tax Credit (CDCTC) allows working families to keep more of what they earn to pay for child care. A family’s credit depends on four factors: …
State-By-State: A Look At How Many Families Receive the Child and Dependent Care Tax Credit (CDCTC)
The Child and Dependent Care Tax Credit (CDCTC) helps millions of working families cover a portion of their child care costs. In 2022, more than 5.7 million families nationwide benefitted …
FFYF Capsule Collection: Tax Policy and Child Care
In A Nutshell With two-thirds of children ages five and under living in homes where all available parents are working, child care is not optional for most families – it’s …
TOPLINES: Child Care in the 2025 Tax Reconciliation Package
The final version of the 2025 tax reconciliation package (also known as H.R.1) was signed into law on July 4th, 2025. The bill permanently improves three pieces of tax policy …
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POLLING: Rural Voters on Child Care and Head Start
In a new poll from First Five Years Fund, Rural Americans say money is tight, and child care is a significant part of that burden. The survey shows that the …
FFYF’s Sarah Rittling on Child Care Tax Enhancements in the Final Reconciliation Package
Final passage of the 2025 reconciliation bill contains updates to tax credits which will help make child care more affordable for more working families with young children including: The following …
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