Child Care Tax Credit Calculator
Child care credit from expenses, AGI tiers, and caps per IRS.
What it does
The Child and Dependent Care Credit pays 20 to 35% of work-related care by AGI, capped at $3,000 for one child or $6,000 for two or more. Both spouses must earn (or study) for the expenses to count.
The tool above takes paid care with AGI, children, earnings, and benefits. It returns the credit with countable expenses and the rate.
The default $4,000 at $30k AGI for one child counts $3,000 at 27% for $810. Two children at $8,000 and $50k AGI count $6,000 at 20% for $1,200.
Math follows IRS Publication 503 with Topic 602 and Form 2441 tables behind them. All three agree on caps and tiers used here.
How to use
- Enter care expenses paid.
- Enter AGI.
- Pick one or two+ children.
- Enter earned income.
- Subtract employer benefits.
- Read credit, countable, rate.
Formula
- paid
- Work-related care paid.
- earned
- Smaller earned income if joint.
- cap
- $3k one, $6k two+, minus benefits.
- rate
- AGI tier percent.
Rate steps one point per $2,000 over $15k with a 20% floor. The yearly cap never prorates by months; a child turning 13 counts only earlier expenses. Provider name, address, and TIN report on Form 2441.
Worked example
Example: $4,000 of care
Defaults: $4k care, $30k AGI, 1 child, $50k earned.
- Paid $4,000 care for one age 4 child.
- AGI $30,000, earned $50,000, no benefits.
- Countable: min(4,000, 50,000, 3,000) = $3,000.
- Rate: $30k sits 29-31k band = 27%.
- Credit: 3,000 x 27% = $810.
- Nonrefundable: cuts tax, never refunds.
- Tool shows $810.00, $3,000.00 countable, 27% rate.
Reference table
| AGI | Rate | Note |
|---|---|---|
| To $15,000 | 35% | Top rate |
| $15k-$25k | 34% to 30% | Steps down |
| $25k-$43k | 29% to 21% | Keeps sliding |
| Over $43,000 | 20% | Floor rate |
Limits
- Nonrefundable; liability caps it.
- Work-related only, no schooling.
- Provider tests exclude family.
- Benefits shrink the cap.
Common mistakes
- Counting kindergarten tuition.
- Skipping provider TINs.
- Missing the earned test.
- Claiming past age 13 months.
- Forgetting benefit offsets.
Try it yourself
Quick checks. Answers sit tucked under each question.
Two kids, $8k care, $50k AGI?
Countable $6,000 at 20% = $1,200.00.
$2k care, $10k AGI, 1 child?
35% x $2,000 = $700.00.
Two kids, $9k care, $100k AGI, $120k earned?
min(9,000, 120,000, 6,000) = $6,000 at 20% = $1,200.
Questions
How is the credit computed?
Rate times countable expenses: min(paid, earned, $3k/$6k cap). 2025 rates 35% down to 20%.
What are the expense caps?
$3,000 for one, $6,000 for two or more, minus excluded employer benefits.
How does AGI set the percent?
35% to $15k AGI sliding to 20% past $43k, one point per $2,000.
Do both spouses need earnings?
Yes: the smaller of the two earned incomes caps countable expenses.
Does it refund?
No. Nonrefundable means zero past zero liability; employer benefits exclude separately.
Who cannot be the provider?
No: spouse, under-19 children, dependents, and the under-13 parent fail the tests.