Across the nation, millions of parents and individuals struggle to afford quality care for their loved ones while juggling work or school.
The federal child and dependent care tax credit (CDCTC) is designed to offset the cost of child and dependent care for low- and middle-income households. The credit can help families recover some caregiving expenses that allow parents or guardians to work or search for work.
While the federal government offers families several subsidies that can ease some of the financial strain tied to care, your state may also offer an additional child and dependent care tax credit or deduction.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Read on to find out if your state makes our list.
States that offer a child and dependent care tax credit
Currently, 26 states and the District of Columbia offer their version of the Child and Dependent Care Tax Credit (CDCTC) to assist families with varying income levels.
The credit's value varies by state, including its refundability and target audience.
While some states enhance the federal CDCTC, others provide specific credits or deductions for elder care or certain childcare costs. Additionally, three states offer a deduction for child or elder care expenses.
Let’s dive into our list:
Arkansas
Arkansas taxpayers have access to the Household and Dependent Care Services Tax Credit designed to offset household and dependent care services that are necessary for gainful employment.
- The credit is equal to 20% of the federal CDCTC
- That’s up to a maximum of $210 for one child or dependent, and,
- A maximum of $420 for two or more children or dependents
Additionally, the credit functions as two tax credits: one refundable and one nonrefundable, with the refundable credit only available for the care of a child under six in an “approved child care facility.” There is also no income cut-off for this credit.
How to claim:
You can claim up to 20% of the federal credit amount. Taxpayers must complete form AR1000 and attach a copy of their federal child and dependent care credit form.
That means you’ll also have to file an IRS Form 2441
California
California offers a nonrefundable child and dependent care similar to the federal credit, with the amount of credit contingent upon a taxpayer’s income. You can claim the credit if you have qualifying work expenses to care for your child, spouse, registered domestic partner, or dependent.
When it comes to the spouse or a domestic partner, they’ll qualify only if:
- They are mentally or physically unable to take care of themselves
- They are enrolled as a full-time student during any 5 months of the year
The percentage of the federal credit will also depend on your income:
| Income threshold | Percentage of federal CDCTC |
| $40,000 or less | 50% |
| Over $40,000 to $70,000 | 43% |
| Over $70,000 to $100,000 | 34% |
| Over $100,000 | 0% |
To claim the credit, file your California Resident Income Tax Return, Form 540, or the California Nonresident or Part-Year Resident Income Tax Return Form 540NR.
To claim child and dependent care expenses, attach the California Form Child and Dependent Care Expenses Credit (Form 3506) to your state income tax return.
Colorado
Colorado offers two credits targeting care.
The first is the refundable Colorado child and dependent care tax credit, which is based on the federal credit and is available to:
- Taxpayers with an adjusted gross income less than or equal to $60,000
- The credit is equal to 50% of the federal CDCTC
The second credit is a nonrefundable Low Income Child Care Expenses Credit. This credit equals 25% of the taxpayer’s child expenses and is capped at $500 for a single dependent or $1,000 for two or more dependents. You can claim this tax credit if:
- You are a taxpayer with an adjusted gross income less than or equal to $25,000, who doesn’t have sufficient tax liability to qualify for the federal credit
- The credit is available for expenses associated with the care of a dependent age 13 or younger
Upcoming changes for Colorado child care credits:
Beginning tax year 2026, the two child care expense credits will be merged into one tax credit: the child and dependent care tax credit. This will have an adjusted gross income cap of $60,000.
- The new law will also match qualified dependents to the federal definition, which includes dependents other than a child age 13 or younger.
- The amount of the state CDCTC will also increase to 70% of the federal credit
- Beginning tax year 2027, the adjusted gross income cap will be adjusted for inflation
Delaware
The state of Delaware has a nonrefundable child and dependent care tax credit that’s equal to 50% of the federal credit. If you are married and file jointly, but determine Delaware taxes separately, the credit will be applied against the spouse with the lower taxable income.
District of Columbia
The District of Columbia offers two versions of the state child and dependent care tax credit.
- The District of Columbia Keep Child Care Affordable Tax Credit (formerly known as Early Learning Credit). This credit is fully refundable and capped at $1,160 per eligible child for tax year 2024.
- The DC Credit for Child and Dependent Care. This is a nonrefundable credit equal to 35% of the federal CDCTC. For filers earning over $43,000 the maximum credit is $210 for one qualifying child and $420 for 2 or more qualifying children.
Who qualifies for these credits?
District of Columbia taxpayers who qualify for the federal credit are automatically eligible. However, your income, tax filing status, and your child's age may impact your ability to claim the credit.
Who qualifies as an eligible child?
To claim the Keep Child Care Affordable Tax Credit an eligible child must have been born between October 1, 2020, and December 31, 2024, and claimed as a dependent by the taxpayer. A child that is age 4 between January 1 and Sept. 30, 2024, is no longer eligible.
As for the DC CDCTC, qualifying children must be under 13. Just as with the federal credit, you may also claim a spouse or dependent if they are unable to care for themselves.
Georgia
The state of Georgia also offers two credits to help working families recover some expenses related to caring for their loved ones.
- Georgia Child and Dependent Care Credit. This tax credit is 30% of the federal CDCTC, cannot be carried forward, and can recoup expenses for qualified child and dependent care expenses.
- Qualified Caregiving Expense Credit. This credit is available for qualified care expenses for family members 62 and older, or a dependent determined to be disabled by the Social Security Administration. It’s equal to 10% of the cost of qualified caregiving expenses and cannot exceed $150.
What can you claim under Georgia’s Qualified Caregiving Expense Credit?
Some qualifying expenses include home health agency services, personal care services, personal care attendant services, adult day care, respite care, health care equipment, and other supplies determined to be medically necessary by a physician.
Hawaii
Hawaii offers a refundable child and dependent care tax credit for working families that has some similarities to the federal credit.
The tax credit is called the Tax Credit for Child and Dependent Care Expenses, and like the federal credit, the credit amount depends on your income.
Qualifying employment-related expenses must enable the taxpayer to get gainful employment. The amount of said expenses incurred during the taxable year cannot exceed:
- $2,400 if there is one qualifying dependent
- $4,800 if there are two or more qualifying dependents
| Adjusted gross income limit | Percentage of credit | Row 0 - Cell 2 |
| Under $25,000 | 25% | Row 1 - Cell 2 |
| Over $25,000 to $30,000 | 24% | Row 2 - Cell 2 |
| Over $30,000 to $35,000 | 23% | Row 3 - Cell 2 |
| Over $35,000 to $40,000 | 22% | Row 4 - Cell 2 |
| Over $40,000 to $45,000 | 21% | Row 5 - Cell 2 |
| Over $45,000 to $50,000 | 20% | Row 6 - Cell 2 |
| Over $50,000 | 15% | Row 7 - Cell 2 |
Source: Haw. Rev. Stat. § 235-55.6
Idaho
Idaho does not offer a tax credit for child and dependent care, however, taxpayers can claim a deduction for expenses related to these costs.
The dependent care tax deduction is up to $12,000 annually.
Iowa
Iowa offers working families two tax credits for child and dependent care, however, taxpayers can only claim one of the following:
- Iowa Child and Dependent Care Credit. This credit is fully refundable and is based on a percentage of the federal credit.
- Iowa Early Childhood Development Tax Credit. This credit targets qualifying expenses for dependents ages 3 to 5. The Iowa ECD is 25% of the first $1,000 of qualifying expenses paid for the taxable year.
To qualify for one of these credits you must have an Iowa taxable income of less than $90,000. If you are married and filing jointly, your incomes must be combined to see if you are eligible. Taxpayers who are married but file separately are generally not eligible.
What qualifies as expenses for early childhood development? If you have a child aged 3 to 5, you can claim certain expenses such as:
- Preschool services
- Books that improve childhood development
- Paper, notebooks, pencils, and art supplies used for a lesson activity
- Child development and educational activities outside of the home, such as music, art, and museum activities (including entrance fees)
Kansas
In Kansas, taxpayers and corporations subject to the Kansas corporate income tax can claim a refundable Child Day Care Assistance Credit. For tax year 2024 and beyond, qualifying taxpayers can get up to 50% of the federal credit.
The childcare assistance credit was created to encourage businesses to:
- Purchase or provide child care services for their employees’ children
- Assist employees in locating child care for their children
For taxpayers who provide the facility and equipment, the credit cannot exceed $45,000 the first year. For subsequent taxable years, the credit cannot exceed $30,000.
Kentucky
Kentucky offers a non-refundable child and dependent care tax credit equal to 20% of the federal credit. That’s up to $210 for one child and $420 for two or more children.
To claim the credit, Kentucky taxpayers must file a Form 740 or 740-NP. The credit is claimed on Line 25 by entering the amount of the federal credit from the federal Form 2441 and multiplying by 20%.
Lousiana
Louisiana offers several tax credits for young children and their early development, known colloquially as the School Readiness Tax Credits. These include:
- Child Care Expense Credit
- Child Care Provider Tax Credit
- Credit for Child Care Directors and Staff
- Tax Credit for Business-supported Child Care
- Tax Credit for Donations to Resource and Referral Agencies
To narrow down our list, the school readiness child care expense credit allows taxpayers to claim expenses for a dependent under the age of six who attended a childcare facility with a quality rating program and has earned at least two stars.
The credit amount is based on the childcare facility’s star rating and ranges from 50% to 200%.
| Quality Rating of Child Care Facility | Percentage of Louisiana Child Care Tax Credit |
| Five Star | 200% |
| Four Star | 150% |
| Three Star | 100% |
| Two Star | 50% |
| One Star or not participating in Quality Start | 0% |
Source: Louisiana Department of Revenue
- The credit is refundable for taxpayers with a federal adjusted gross income of $25,000 or less.
- The credit is non-refundable for taxpayers with an AGI above $25,000. The remaining credit may be carried forward to future tax years.
Maine
Maine offers a credit for childcare expenses equal to 25% of the federal CDCTC. The credit doubles to 50% if the expenses are related to a quality childcare provider. This credit is also refundable up to $500.
Maryland
If you were eligible for the federal CDCTC, you may be eligible for the state of Maryland Credit for Child and Dependent Care Expenses. The credit is 32% of the federal credit, but phased out for taxpayers with a federal adjusted gross income over $104,650 (and $161,100 for married filing jointly). To see your income threshold, visit marylandtaxes.gov for more details.
To claim the credit, complete Part B of Form 502CR and submit your Maryland income tax return. You must report the credit on Maryland Form 502, Form 505, or Form 515.
Massachusetts
With the Massachusetts Child and Family Tax Credit, eligible taxpayers who are year-round or part-time residents can claim up to $440 for each qualifying dependent or individual they pay to care for.
You can claim the credit if you’ve used your personal income to pay for the care of a:
- A dependent child under age 13
- Dependent or spouse with a disability
- Dependent age 65 or over
Taxpayers in Massachusetts who can claim the credit include:
- Single taxpayers
- A taxpayer filing as a head of household
- Married filing jointly
There are no income or expense requirements to claim this tax credit, eligibility will be based on having a household with a qualifying individual.
Minnesota
The Minnesota Child and Dependent Care Credit is fully refundable and can help offset qualifying care expenses for one or more individuals. To claim this credit, you must complete and attach a Schedule M1CD, Child and Dependent Care Credit with your state income tax return.
Eligible expenses must be targeting the care of your qualifying person so you (and your spouse, if filing jointly) can work or look for work. As with the federal CDCTC, you can claim up to $3,000 in qualifying expenses and $6,000 for two or more qualifying individuals.
The credit amount is phased out depending on your federal adjusted gross income. For tax year 2023, the credit begins to phase out if your AGI is more than $59,210 and:
- Taxpayers with one qualifying dependent: Phases out completely if you earn more than $71,210
- Taxpayers with two or more qualifying dependents: Phases out completely if you earn more than $83,210
Missouri
Missouri doesn’t have a tax credit for child and dependent care but a nonrefundable tax credit that targets elder care. Missouri’s Shared Care Tax Credit (SCT) helps families offset the costs of caring for an elderly person (age 60 or older).
The credit is worth up to $500 or your Missouri tax liability, whichever is less.
The eligible applicant must meet the following criteria:
- Be registered with the state Department of Health as a certified shared care member
- Not receive monetary compensation for providing care for the elderly person
The elderly person must live in the same residence as the caregiver for at least six months of the year and:
- Be mentally or physically incapable of living alone, determined by a licensed physician
- Require assistance with daily living activities
- Is not allowed to operate a motor vehicle
- Does not receive funding or services through Medicaid or the Social Services Block Grant Fundings
Nebraska
With Nebraska’s refundable Child Care Tax Credit Act, eligible households with children under age 5 enrolled in a licensed childcare facility. The credit amount is equal to:
- $2,000 per child, if the total household income is equal to or less than $75,000
- $1,000 per child for households with an annual income between $75,000 and $150,000
If the total household income is more than $150,000, the parent or legal guardian is no longer eligible for the tax credit.
The state of Nebraska also offers several other family tax credits aimed at child care or early development including:
- Child Care Tax Credit, Nonrefundable (CTC-NR): To encourage the private sector (businesses, philanthropic organizations) to help grow child care availability. The credit is equal to 75% or 100% of a qualifying contribution and the total credit amount cannot surpass $100,000 annually.
- School Readiness Tax Credit, Refundable: A refundable tax credit worth between $2,300 and $3,500 that encourages childcare professionals and licensed childcare programs to develop their careers. The amount of the credit is based on the professional classification level determined by the Nebraska Department of Education/ Step Up.
- School Readiness Tax Credit, Nonrefundable: The tax credit is available to qualifying childcare owners to encourage the growth of their programs. The amount is determined by the Step Up to Qualify rating and the average monthly number of children enrolled in the state childcare subsidy program annually. Applicants can receive $400 to $1,200.
New Jersey
In the state of New Jersey, qualifying households can get a refundable child and dependent care tax credit equal to a percentage of the federal credit. Eligibility for the credit is similar to the federal credit. Additionally, the amount of the credit will be based on your income level.
For tax year 2021- 2023, the latest data available for the tiered amounts were as follows:
| New Jersey taxable income | Amount of NJ credit |
| $30,000 or lower | 50% of the federal credit |
| Over $30,000 but not over $60,000 | 40% of the federal credit |
| Over $60,000 but not over $90,000 | 30% of the federal credit |
| Over $90,000 but not over $120,000 | 20% of the federal credit |
| Over $120,000 but not over $150,000 | 10% of the federal credit |
Source: New Jersey Treasury Department
New Mexico
In New Mexico, eligible households may be able to offset some childcare costs through the state’s refundable Child Day Care Credit. The amount of the credit may not exceed $1,200 or $600 for an individual filing married separately. A maximum of $480 is available per child.
To qualify for New Mexico’s Child Day Care Credit, you must have been gainfully employed for part of the tax year and:
- Have a modified adjusted gross income of $30,160 or less
- You are a resident of New Mexico during any part of the year
- You did not receive public assistance under TANF, the New Mexico Works Act, or similar programs
Additionally, you were not reimbursed or compensated for the amount of child day care expenses incurred and cannot be claimed as a dependent by another taxpayer for the year.
New York
New York offers a child and dependent care tax credit that reimburses up to 50% of the federal credit amount for costs associated with caring for a qualifying child or dependent. You are entitled to this credit if you already qualify for the federal CDCTC.
For New York, the refundability of the credit will depend on your residency status:
- Full-year residents will get a fully refundable credit
- Nonresidents get a nonrefundable credit
- Part-year residents are offered a partially refundable credit
Ohio
Ohio offers households with an income under $40,000 a state child care and dependent care credit. The credit is up to 100% of the federal credit, contingent on your income.
- 100% of the federal credit is available to those with incomes less than $20,000
- 25% of the federal credit is available to those with incomes between $20,000 and $40,000
- 0% of the federal credit is available to anyone with an income above $40,000
Oklahoma
With Oklahoma’s child and dependent care tax credit, taxpayers can receive a credit worth up to 35% of the federal tax credit. The expenses must be necessary to allow the taxpayer to look for work or work.
The credit is generally compared with the state’s child tax credit, and taxpayers can claim whichever credit is most beneficial. The child and dependent care tax credit is also based on an income threshold to determine your amount.
Separately, Oklahoma also has the Caring for Caregivers Act, a tax credit targeting elder care for someone age 62 and above.
The caregiver must have an adjusted gross income below $50,000 or $100,000 (for married filing jointly). The care hired or given must be deemed necessary to care for the dependent, spouse, parent, or relative by blood or marriage.
For 2024, the credit is worth up to $2,000 per year, and $3,000 for those caring for a veteran or person with dementia. The total cap for the state is $1.5 million per year.
Oregon
The state of Oregon offers low- to -moderate-income working families the Working Family Household and Dependent Credit. This refundable tax credit is based on the federal credit.
Your eligibility for the credit will depend on the number of qualifying dependents on your tax return and household income.
Separately, Oregon also offers a credit for expenses in lieu of nursing home care. The credit is against taxes otherwise due for expenses incurred regarding food, clothing, medical care, and transportation so that the qualifying individual is not placed or maintained in a nursing home.
The credit amount is $250 or 8% of the expenses paid during the taxable year, whichever is less.
Pennsylvania
The Commonwealth of Pennsylvania offers a refundable Child and Dependent Care Enhancement Tax Credit based on the federal credit to eligible households when they file their Pennsylvania personal income tax return (PA-40).
The credit amount is between $600 and $2,100, depending on your income level and the number of qualifying dependents. The credit amounts are as follows:
- $1,050 (one child or dependent) or $2,100 (for two or more children/ dependents)
- The minimum credit amounts are $600 (one child or dependent) or $1,200 (for two or more dependents claimed) if expenses are at least $3,000 per dependent or child
Rhode Island
If you qualify for the federal child and dependent care tax credit, Rhode Island taxpayers are automatically eligible for the state’s nonrefundable corresponding tax credit. The Rhode Island child and dependent care tax credit is 25% of the federal credit.
South Carolina
South Carolina taxpayers who reside for the entire year in the state may be eligible for a tax credit equal to 7% of the federal child and dependent care tax credit through the state. The maximum credit is $210 for one child or $420 for two or more children.
Part-time residents or nonresidents are not eligible for the tax credit, nor are married couples filing separately.
Vermont
With the Vermont Child and Dependent Care Credit, eligible households can claim up to 72% of the federal credit. This tax credit is fully refundable to all qualifying Vermont taxpayers.
Virginia
While Virginia doesn’t offer a tax credit equivalent to the federal child and dependent care tax credit, you can claim a state deduction equal to qualifying employment expenses used to calculate the federal credit.
- You may even qualify for the deduction if you weren’t able to claim the federal credit
- This deduction amounts to $3,000 for one dependent or child, or $6,000 for two or more dependents
Additionally, foster parents in Virginia may claim a deduction of $1,000 for each child residing in their home under permanent foster care.
Wisconsin
The state of Wisconsin recently expanded its child and dependent care tax credit. Gov. Tony Evers signed a bipartisan bill that raised the credit amount from 50% to 100% of the federal credit.
For tax year 2024, the cap on allowable childcare expenses was raised to $10,000 for one dependent and $20,000 for two or more dependents.
That means, the maximum credit amount ranges from:
- $2,000 to $3,500 for one dependent (up from $300 and $525 before the expansion)
- $4,000 to $7,000 for two or more dependents (up from $600 and $1,050 before the expansion)
According to the governor's office, the change will positively improve the financial well-being of more than 110,000 taxpayers, with an average benefit amount of $656.
Related Content:
-
New Year Brings New Jersey Gas Tax Increase: What to KnowState Tax As congestion taxes heat up between states, New Jersey commuters will pay more at the pump in 2025.
-
Investing Moves to Make at the Start of the YearAfter another big year for stocks in 2024, investors may want to diversify in 2025. Here are five portfolio moves to make at the start of the year.
-
Should Rent Be Part of Your Retirement Plans?Retirement Taxes Retiree renters may qualify for potential tax savings. Are you considering a move?
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
New Law Delivers Tax Breaks to Natural Disaster Victims, But Is It Enough?Tax Relief The legislation provides critical tax relief to thousands of natural disaster victims across the country.
-
On the Naughty List: Holiday Tax Scams to Look Out ForTax Tips The IRS says scammers are on the prowl for your financial information. Know the signs so you don't fall victim.
-
End of Expanded Premium Tax Credit Would Drive Uninsured Rates HigherTax Credits Millions of people could become uninsured if Congress fails to extend the enhanced premium tax credit.
-
Retirement Abroad? Three Countries Without Inheritance TaxRetirement Taxes These 2025 top-retiree-friendly countries have an added benefit: potential tax savings for you and your heirs.
-
Five Tax-Savvy Ways To Donate This Holiday SeasonCharitable Donations Food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.
-
Tax Pros: Is Someone Fraudulently Filing Returns With Your PTIN?Tax Filing An unmonitored preparer tax identification number (PTIN) can lead to serious issues.
