Summer is here, and many families are balancing work with the cost of care, including day camps, daycare, and babysitters. If you pay for care so you can work or look for work, you may qualify for the child and dependent care credit on your 2026 tax return.
What this credit is (and isn’t)
The child and dependent care credit is a nonrefundable tax credit. That means it can reduce the federal income tax you owe, but it cannot by itself create a refund if your tax bill is already zero.
Who qualifies
You may be able to claim the credit if you paid care expenses for a qualifying individual. In general, this includes your child under age 13 who qualifies as your dependent. It can also include a spouse or other dependent who is physically or mentally incapable of self-care and lived with you for more than half the year.
If you are divorced or separated, only the custodial parent (generally the parent the child lived with for the greater part of the year) can claim this credit. If you are married, you generally must file a joint return to claim it.
What expenses count
Eligible expenses are amounts you pay for care so that you can work or actively look for work. In general, the expense must be mainly for care, not education. Many common care arrangements can qualify, including day camps. Overnight camps, summer school, and tutoring are not eligible for this credit.
How much the credit can be in 2026
For the 2026 tax year, you can count up to $3,000 of qualifying expenses if you have one qualifying individual, or up to $6,000 if you have two or more. The credit is a percentage of those expenses.
For 2026, that percentage is based on your income and works on a sliding scale. It can be as high as 50% and gradually decreases as income rises, but it does not drop below 20%. Because of that, higher-income taxpayers may still qualify, though often at a lower percentage.
The maximum possible credit for 2026 is $1,500 if you have one qualifying individual (50% of $3,000) or $3,000 if you have two or more (50% of $6,000). Your actual credit may be lower depending on your income, the amount of your care expenses, your earned income, and whether you receive dependent care benefits through work.
Earned income requirement
To claim the credit, you generally must have earned income for the year, such as wages or self-employment income. If you are married and file jointly, both spouses generally must have earned income.
If one spouse is not working, the credit is usually not allowed unless that spouse was a full-time student for at least five calendar months during the year or was physically or mentally incapable of self-care. In those situations, the nonworking spouse may be treated as having limited “deemed” earned income for purposes of figuring the credit.
Who you cannot pay
You must be able to properly report the care provider on your tax return. You generally cannot claim the credit for amounts paid to your spouse, anyone you claim as a dependent, your child who is under age 19 at the end of the year, or your child’s other parent. You also need the provider’s name, address, and taxpayer identification number.
Using a dependent care FSA or DCAP at work
Many employers offer a Dependent Care Assistance Program (DCAP) or dependent care FSA that lets you set aside money from your paycheck on a pre-tax basis to pay for eligible dependent care expenses. For 2026, you may generally contribute up to $7,500 if you are single or married filing jointly, or $3,750 if you are married filing separately.
It is important to coordinate these benefits with the credit. You cannot use the same dollar of expense for both tax-free reimbursement through a DCAP/FSA and the child and dependent care credit. In addition, any tax-free dependent care benefits you receive reduce, dollar-for-dollar, the expenses you can use to calculate the credit.
Final thoughts
If you pay for child care or other dependent care so you can work, the 2026 child and dependent care credit may help lower your tax bill. Keep receipts and provider information during the year, and track any dependent care benefits you receive through your employer so you can claim the right tax benefit when you file.