Eligibility for the Child and Dependent Care Credit (CDCC) is determined under IRC §21, IRS Publication 503, and Form 2441 (Form 1040). A taxpayer must meet all required tests to claim the credit.
Qualifying Person Test
- The care must be provided for one or more qualifying persons, as defined on Form 2441.
- A qualifying person includes:
- A qualifying child under age 13 whom you can claim as a dependent (or could claim as a dependent except for specific custody/divorced parent rules)
- Your spouse who is physically or mentally incapable of self-care and lived with you for more than half the year
- A dependent (or individual who would be a dependent except for certain IRS exceptions) who is physically or mentally incapable of self-care and lived with you for more than half the year
- For divorced or separated parents, a child may be treated as a qualifying person for the custodial parent if the child meets the residency and support tests under IRS dependency rules.
Earned Income Test
- You (and your spouse if filing jointly) must have earned income during the year
- Earned income includes wages, salaries, tips, and net earnings from self-employment
- If your spouse is a full-time student or physically/mentally incapable of self-care, they are treated as having earned income for each month of that condition (deemed income rules)
- Nontaxable combat pay may be included if you elect to include it for this credit.
Work-Related Expense Test
Expenses must be paid to allow you (and your spouse, if married) to work or look for work.
Eligible payments include:
- Payments to a care provider for household or dependent care services
Disallowed payments include:
- Payments to your spouse
- Payments to the parent of your qualifying child (under age 13)
- Payments to your child under age 19, even if not your dependent
- Payments to any individual you can claim as a dependent
Filing Status Test
- You must file as:
- Single
- Head of household
- Qualifying surviving spouse
- If married, you must generally file a joint return, unless you meet a limited exception (such as living apart from your spouse for the last 6 months of the year and meeting other requirements under §21(e)).
Care Provider Identification Test
You must identify the care provider on Form 2441, Part I, including:
- Name
- Address
- Taxpayer Identification Number (SSN, ITIN, EIN, or ATIN where applicable)
If you cannot obtain the information, you must show due diligence in attempting to obtain it.
Dollar Limit and Reduced Dollar Limit
- The maximum amount of expenses you can claim is $3,000 for one qualifying person or $6,000 for two or more.
- If you exclude or deduct dependent care benefits from a benefit plan, the amount excluded/deducted must be less than the dollar limit to claim a credit on the remaining amount.
Source:
IRS Publication 503 (2025)
Form 2441 (2025)
Disclaimer: Always verify eligibility and requirements with the current year’s official IRS forms and instructions from the Federal Department of Revenue. Tax laws and eligibility criteria may change annually. For complex situations, consult a tax professional or attorney.