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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Tax Glossary

Consumer interest

Interest incurred on personal debt and consumer credit. Consumer interest is not deductible.

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