Since the outbreak of the pandemic in 2020, the United States government has released a series of financial supports for citizens in wake of the pandemic under the American Rescue Act to help struggling Americans.
One of the financial support allows parents to claim up to $8,000 more dollars on their taxes in 2022.
The support is part of the child and dependent care tax credit that helps offset the costs of raising a child or caring for a dependent.
To determine your eligibility, authorities evaluate your income and how much you spend to care for your child when you’re working or in school.
People who earn more than $438,000 are ineligible.
What one is paid is calculated by using income plus a percentage of the expenses you have to pay for the child to be cared for as you work or attend school.
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Families with an income under $125,000 could claim 50% of their qualifying expenses for children under 13 and they may claim up to $8,000 for a single child.
Families may also claim 50% of qualifying expenses up to $16,000 for two children under 13.
Families who make between $125,000 and $183,000 could qualify, but may only claim up to 20%.
Caregivers may also make the same claims.
The claim is refundable. You do not need to owe taxes to get the credit and can get a refund if possible.
To benefit from the payment, form 2441 which outlines child care expenses must be filled and submitted with 2021 tax return. Proof of the expenses must be provided.