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June 30, 2021 11:38 pm
IRS FAQs on the Dependent Care Credit for 2021
The American Rescue Plan Act of 2021, which was enacted on March 13, 2021, greatly expanded the dependent care credit for 2021. It raised the cap on expenses taken into account in figuring the credit and made the credit fully refundable for 2021. The IRS has extensive FAQs at https://www.irs.gov/newsroom/child-and-dependent-care-tax-credit-faqs on the credit to help you determine if you’re eligible for it, which work-related expenses qualify, and how to figure the credit amount.
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Deductions
Items directly reducing income. Personal deductions such as for mortgage interest, state and local taxes, and charitable contributions are allowed only if deductions are itemized on Schedule A, but deductions such as for alimony, capital losses, moving expenses to a new job location, business losses, student loan interest, and IRA and Keogh deductions are deducted from gross income even if itemized deductions are not claimed.
