Knowledge Tree
Child and Dependent Care Credit
Also known as: CDCC, Child and Dependent Care Tax Credit
Facts (15)
Sources
The Role of Taxation in Family Inequality: Possibilities for Reform ncfr.org Dec 20, 2024 15 facts
claimA fully refundable Child and Dependent Care Credit (CDCC) is projected to narrow eligibility gaps between Black and White households by two percentage points and between Latine and White households by one percentage point.
claimThe Child and Dependent Care Credit (CDCC) does not reduce median child care costs for one child below the 7% of median family income benchmark in any U.S. county.
claimExpanding the Child and Dependent Care Credit (CDCC) and making it fully refundable may help offset taxes and provide income support to multigenerational families.
referencePepin (2022) analyzed how a permanently refundable Child and Dependent Care Credit would affect eligibility, benefits, and incentives.
claimThe one-year expansions of the Child Tax Credit and the Child and Dependent Care Tax Credit serve as models for tax reforms that support family functioning and well-being by providing income support and reducing child care costs across the income spectrum.
measurementUnder the 2021 ARPA expansion of the CDCC, working families could receive up to $4,000 in benefits for each of up to two qualifying individuals.
measurementThe increase in eligibility rates for the Child and Dependent Care Credit (CDCC) across all family types constitutes 18% of existing childcare spending and 10% of adjusted gross income.
claimThe Child and Dependent Care Credit (CDCC) is a nonrefundable tax credit that only offsets income taxes owed, which limits its support for low-income working parents.
measurementChildhood poverty in the United States dropped by 46% in 2021, primarily due to increased value and expanded eligibility for tax credits such as the Child Tax Credit, the Child and Dependent Care Credit, and COVID-19-era stimulus payments.
claimThe size of the Child and Dependent Care Credit (CDCC) has never reflected the true cost of child care.
measurementThe Child and Dependent Care Credit (CDCC) is capped at the lesser of $600 per child or $1,200 per family for most taxpayers.
claimThe American Rescue Plan Act (ARPA) expanded the Child and Dependent Care Credit (CDCC), making it fully refundable for the 2021 tax year.
measurementUnder the 2021 temporary expansion of the Child and Dependent Care Credit (CDCC), working families could receive up to $4,000 in benefits for each of up to two qualifying individuals.
claimThe Child and Dependent Care Credit (CDCC) is a tax credit based on household income and child care spending, established by Congress in 1976 to help offset the costs of child care.
measurementThe increase in eligibility rates resulting from a fully refundable CDCC constitutes 18% of existing childcare spending and 10% of adjusted gross income.