Child and Dependent Care Tax Credit (2026 and 2027)
The Child and Dependent Care Credit can put $600–$3,000 back in your pocket for childcare you already pay for. Here's exactly how it works in 2026, the credit rate at every income level, and why nothing changes for 2027.
What Is the Child and Dependent Care Credit?
The Child and Dependent Care Credit is a federal tax credit that reimburses part of what you spend on childcare so you (and your spouse, if married) can work or look for work. It's not the same as the Child Tax Credit — you can claim both. You claim it on IRS Form 2441 with your return.
For 2026 you can count up to $3,000 of expenses for one qualifying child or $6,000 for two or more, and the credit is worth 20%–50% of that, depending on income (raised from 35% by P.L. 119-21). That's a maximum of $1,500 for one child or $3,000 for two+.
How Much Is the Credit Worth?
The percentage starts at 50% for the lowest incomes and drops 1 point for each $2,000 (or part of $2,000) of adjusted gross income (AGI) above $15,000, reaching 35% above $43,000. It stays at 35% until $150,000 on a joint return or $75,000 for other filers, then drops again, 1 point per $4,000 (joint) or $2,000 (others), to a floor of 20%. Find your AGI in the table to see your rate and the most you can get:
| Credit rate | AGI, married filing jointly | AGI, single or head of household | Max credit, 1 child | Max credit, 2+ children |
|---|---|---|---|---|
| 50% | $15,000 or less | $15,000 or less | $1,500 | $3,000 |
| 49% | $15,001–$17,000 | $15,001–$17,000 | $1,470 | $2,940 |
| 48% | $17,001–$19,000 | $17,001–$19,000 | $1,440 | $2,880 |
| 47% | $19,001–$21,000 | $19,001–$21,000 | $1,410 | $2,820 |
| 46% | $21,001–$23,000 | $21,001–$23,000 | $1,380 | $2,760 |
| 45% | $23,001–$25,000 | $23,001–$25,000 | $1,350 | $2,700 |
| 44% | $25,001–$27,000 | $25,001–$27,000 | $1,320 | $2,640 |
| 43% | $27,001–$29,000 | $27,001–$29,000 | $1,290 | $2,580 |
| 42% | $29,001–$31,000 | $29,001–$31,000 | $1,260 | $2,520 |
| 41% | $31,001–$33,000 | $31,001–$33,000 | $1,230 | $2,460 |
| 40% | $33,001–$35,000 | $33,001–$35,000 | $1,200 | $2,400 |
| 39% | $35,001–$37,000 | $35,001–$37,000 | $1,170 | $2,340 |
| 38% | $37,001–$39,000 | $37,001–$39,000 | $1,140 | $2,280 |
| 37% | $39,001–$41,000 | $39,001–$41,000 | $1,110 | $2,220 |
| 36% | $41,001–$43,000 | $41,001–$43,000 | $1,080 | $2,160 |
| 35% | $43,001–$150,000 | $43,001–$75,000 | $1,050 | $2,100 |
| 34% | $150,001–$154,000 | $75,001–$77,000 | $1,020 | $2,040 |
| 33% | $154,001–$158,000 | $77,001–$79,000 | $990 | $1,980 |
| 32% | $158,001–$162,000 | $79,001–$81,000 | $960 | $1,920 |
| 31% | $162,001–$166,000 | $81,001–$83,000 | $930 | $1,860 |
| 30% | $166,001–$170,000 | $83,001–$85,000 | $900 | $1,800 |
| 29% | $170,001–$174,000 | $85,001–$87,000 | $870 | $1,740 |
| 28% | $174,001–$178,000 | $87,001–$89,000 | $840 | $1,680 |
| 27% | $178,001–$182,000 | $89,001–$91,000 | $810 | $1,620 |
| 26% | $182,001–$186,000 | $91,001–$93,000 | $780 | $1,560 |
| 25% | $186,001–$190,000 | $93,001–$95,000 | $750 | $1,500 |
| 24% | $190,001–$194,000 | $95,001–$97,000 | $720 | $1,440 |
| 23% | $194,001–$198,000 | $97,001–$99,000 | $690 | $1,380 |
| 22% | $198,001–$202,000 | $99,001–$101,000 | $660 | $1,320 |
| 21% | $202,001–$206,000 | $101,001–$103,000 | $630 | $1,260 |
| 20% | Over $206,000 | Over $103,000 | $600 | $1,200 |
Max credit = rate × $3,000 (one qualifying person) or $6,000 (two or more), before the earned-income and tax limits below. Married couples filing separately generally can't claim the credit. Rates and breakpoints from 26 U.S.C. §21(a)(2) as amended by P.L. 119-21 §70405, which match the 2026 phaseout schedule in the IRS's draft Form 2441 instructions.
To run your own numbers, including the earned-income limit, the tax-liability cap and any Dependent Care FSA benefits, use our child care tax credit calculator.
Is There an Income Limit?
No. Unlike most family tax breaks, this credit never phases out to zero: at any income above $206,000 (joint) or $103,000 (other filers) you still get 20%, worth up to $600 for one child or $1,200 for two or more. Three other limits decide what you actually receive:
- Earned income: the expenses you count can't exceed the earned income of the lower-earning spouse, or your own if you're unmarried. A spouse who is a full-time student or unable to care for themselves is treated as earning $250 a month (one qualifying person) or $500 a month (two or more).
- Your income tax: the credit is nonrefundable, so it can't be more than your federal income tax. Families with little or no income tax get little or nothing from it.
- Dependent Care FSA money: tax-free FSA benefits reduce the $3,000 / $6,000 cap dollar for dollar.
What Changes in 2027?
Nothing in the credit itself. The 50% top rate, the $15,000, $43,000, $75,000 and $150,000 breakpoints, and the $3,000 / $6,000 expense caps are written into §21 as fixed amounts with no inflation adjustment, so the table above applies to both 2026 and 2027. Two practical points:
- Your first claim at the new rates comes in early 2027, when you file your 2026 return. Before 2026 the rate topped out at 35%.
- The tax-liability cap moves a little. Tax brackets and the standard deduction rise with inflation each year, so the income tax that limits your credit will differ slightly in 2027.
Who Qualifies?
- Earned income: You (and your spouse, if filing jointly) must have earned income during the year, and the expenses you claim can't exceed the lower earner's income. Limited exceptions apply for full-time students or disabled spouses.
- A qualifying person: A child under age 13 when care was provided, or a spouse/dependent who can't care for themselves. Care during school breaks counts too when it lets you work (see winter break childcare costs).
- Work-related care: The care must let you work or actively look for work.
- Provider details: You'll need the provider's name, address, and taxpayer ID (SSN or EIN) for Form 2441 — including for a nanny you pay legally.
Stacking With a Dependent Care FSA
If your employer offers a Dependent Care FSA, you can use both — but not on the same dollars. The FSA lets you set aside up to $7,500 pre-tax in 2026, but FSA dollars reduce the expenses that count toward the credit, and the caps are only $3,000 or $6,000, so a full FSA leaves no credit. Higher earners usually save more through the FSA; for two or more children at middle incomes the credit alone can be worth more. Our FSA vs. credit guide shows which order wins for your bracket.
Don't Forget State Credits
More than 25 states offer their own childcare credit or deduction on top of the federal one — often worth 20%–50% of the federal amount, and some are refundable. See your state childcare tax benefits to add to your total.
Frequently Asked Questions
How much is the Child and Dependent Care Credit in 2026?
For 2026 it is worth 20%–50% of up to $3,000 in care expenses for one child or $6,000 for two or more, a maximum of $1,500 for one child or $3,000 for two or more. The percentage is 50% up to $15,000 of AGI, falls 1 point per $2,000 to 35% above $43,000, stays there to $150,000 (joint) or $75,000 (other filers), and bottoms out at 20% above $206,000 (joint) or $103,000 (other).
Is there an income limit for the Child and Dependent Care Credit?
No. There is no income above which you lose the credit. The rate falls as income rises but never goes below 20%, which it reaches above $206,000 of AGI on a joint return or $103,000 for other filers. Two other limits do apply: your care expenses can't exceed the earned income of the lower-earning spouse, and the credit can't exceed your income tax.
Will the Child and Dependent Care Credit change in 2027?
No. The 20%–50% rates, the $15,000, $43,000, $75,000 and $150,000 income breakpoints and the $3,000 / $6,000 expense caps are fixed in 26 U.S.C. §21 with no inflation adjustment, so 2027 uses the same figures as 2026.
What is the difference between the Child Tax Credit and the Child and Dependent Care Credit?
The Child Tax Credit is a per-child credit (up to $2,200 per child for 2026, of which up to $1,700 is refundable; Rev. Proc. 2025-32) for simply having a qualifying child. The Child and Dependent Care Credit reimburses part of what you spend on childcare so you can work. They are separate credits and you can claim both on the same return.
How do I claim the childcare tax credit?
File IRS Form 2441 with your Form 1040. You will need each care provider's name, address, and taxpayer ID (SSN or EIN), along with the total you paid. Keep receipts and your provider's year-end statement in case of an audit.
Can I claim the credit for a nanny?
Yes, if you pay the nanny legally as a household employer and the care lets you work. You will report the nanny's wages and provide their SSN on Form 2441. Paying off the books disqualifies you from the credit and the Dependent Care FSA, and creates tax risk.
Is the Child and Dependent Care Credit refundable?
At the federal level it is generally non-refundable, meaning it can reduce your tax bill to zero but won't generate a refund beyond what you owe. Some states offer a refundable version of their own childcare credit.
Sources
26 U.S.C. §21, as amended by P.L. 119-21 §70405 (rates, breakpoints, expense caps, deemed income) · IRS draft 2026 Instructions for Form 2441 (2026 phaseout schedule) · IRS Publication 503 (qualifying people, expenses and providers). Checked October 30, 2026.
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