How much are you eligible for?
For 2022, the child and dependent care credit is much smaller and nonrefundable (in 2021, it was fully refundable). The dollar limit for eligible expenses returns to $3,000 ($8,000 for 2021) for one child and $6,000 ($16,000 for 2021) for two or more qualifying children.
The maximum credit rate is only 35% of eligible expenses if your income is $15,000 or less, which is much lower than the 50% credit rate applied for 2021 if your income was $125,000 or less. The 35% rate decreases as your income rises and is capped at 20% when your income exceeds $43,000, compared to $400,000 for 2021. Thus, you may have been eligible for a credit on your 2021 return, but depending on your circumstances, it may be much lower on your 2022 return.
