FAMILIES can claim up to $8,000 per child in childcare expenses thanks to a new addition to the $1.9 trillion American Rescue Plan Act.
Those who qualify can claim certain expenses up to $8,000 for one eligible child or up to $16,000 for two or more eligible depends after the American Rescue Plan Act, signed into law by Joe Biden in March, more than doubles previous limits.
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Under the new law, child and dependent care credits have been expanded, allowing for families to claim those few extra dollars they're eligible for.
Not only did the limits of child care credits more than double under the new law, but they will now be refundable – but only for 2021.
"This means that an eligible family can get it, even if they owe no federal income tax," reads the IRS website.
This year, any eligible family can claim certain expenses, with the top credit percentage of eligible expenses going up to 50 percent.
That means the maximum credit someone could claim is $4,000 for one dependent or $8,000 for two or more.
As usual, the percentage of credit goes down the higher a taxpayer's income.
However, this year is different in that more people will be eligible for the maximum because the adjusted gross income from where the rate decreases has skyrocketed from $15,000 to $125,000.
For those earning between $183,000 and $400,000, the credit rate drops to 20 percent.
After that, the credit is phased out.
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