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This Child Stimulus Check Can Give You Up To $8,000 In Tax Credit

By Aman Jain. Originally published at ValueWalk.

child stimulus check Child and Dependent Care Credit

The expanded child tax credit proved to be a lifeline for many families, but sadly the payment ended in December 2021. Though lawmakers failed to extend the expanded child tax credit for one more year, families can still claim half of the child tax credit when filing their 2021 tax return. There is, however, one more child stimulus check that families can claim this year. This child stimulus check can give families up to $8,000 provided they paid for the child or dependent care in 2021.

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Child And Dependent Care Credit: What Is It?

This child stimulus check that we are talking about is actually the Child and Dependent Care Credit, which is a tax credit that parents and other caregivers can claim for qualifying dependents. The 2021 American Rescue Plan expanded this credit by more than double.

Thus, this year, eligible families can claim up to 50% of their childcare expenses or up to a maximum of $4,000 under the Child and Dependent Care Credit for one qualifying dependent, or $8,000 for two or more dependents. Prior to the American Rescue Plan, parents were allowed to claim up to 35% of these expenses, or up to a maximum of $2,100 for one child (up to a maximum of $6,000 for two children).

A point to note is that the American Rescue Plan extends the Child and Dependent Care Credit for one year only. The rules will revert back to the original for the next year.

As per the 2021 Treasury report, American families spend between $8,000 to $10,000 per year/per child on child care costs. The child and dependent care tax credit give families some financial support toward covering the cost of care for children under age 13 or adult dependents.

“The child and dependent care tax credit is a credit allowed for a percentage of work-related expenses that a taxpayer incurs for the care of qualifying persons to enable the taxpayer to work or look for work,” the IRS says.

Who Can Claim This Child Stimulus Check?

Talking about who can claim this child stimulus check, there are several eligibility criteria. The first is that it can only be claimed by taxpayers who paid for the child and dependent care, in order to work or look for work. The taxpayer must have had earned income during the year to claim the credit.

Moreover, the taxpayer can claim the child stimulus check for a child below the age of 13, or for a spouse who is incapable of self-care, or for a dependent incapable of self-care. You also must have lived in the U.S. for at least 6 months of the year.

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This entry was posted on Monday, April 18th, 2022 at 9:59 am and is filed under Immediately available to public, ValueWalk. You can leave a response, or trackback from your own site.

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