Childcare and child care; tax credit (Child Tax Credit)

Childcare is one of the largest expenses for families in the United States. On this page, you will find childcare and care options, how to choose a reliable childcare provider, government childcare assistance, and the rules for employing an in-home caregiver. We also explain the Child Tax Credit, the Child and Dependent Care Credit, and the new "Trump Accounts" rules for the 2026 tax year.

• Child care centers: facilities with classrooms organized by age group.
• Family child care homes: places where a caregiver looks after small groups in the caregiver's own home.
• Head Start and Early Head Start: free programs for children from birth to age 5 from low-income families.
• State pre-K: state programs for children ages 3–5. They are low-cost or free in some states.
• School-age care and camps: after-school and vacation programs.
• In-home care: a nanny or relative. For an au pair who comes through an exchange program, see 2.3 Exchange visitor (J-1).
• For the current situation regarding Head Start and immigration status, see 16.6.

1. Learn the basic rules. A license means the minimum health and safety requirements set by the state. A license does not guarantee quality, but it provides oversight.
   • At licensed childcare facilities, staff members undergo background checks, receive first-aid and safe-sleep training for infants, and the building and emergency procedures are inspected.
2. Use your state's search tool. Every state must list licensed childcare providers online.
3. Review the records:
   • license status: licensed, registered, certified, or legally exempt from licensing; whether the license has been suspended
   • inspection reports: health and safety violations and how they were corrected
   • the state's quality rating, if available
4. Call each childcare provider and ask: whether it is licensed, whether there is space, hours of operation, fees, whether it accepts government childcare assistance, and when you can visit.
5. Visit several childcare providers. Bring Childcare.gov's "Look, Listen, and Ask" checklists with you.

• State childcare assistance (voucher, certificate, or subsidy): Using federal funds, states help low-income families who work or attend school pay childcare costs. Requirements vary from state to state.
• Head Start and Early Head Start: free for eligible low-income families.
• State pre-K programs: low-cost or free for eligible families in some states.
• Employer dependent care spending account (Dependent Care FSA): You set aside part of your salary in this account before taxes and use it for childcare expenses.
  • Starting with the 2026 tax year, the tax-exempt amount for employer-provided dependent care assistance increased to $7,500 ($3,750 for married couples filing separately). The previous limit was $5,000.
  • You cannot use the same expense both in this account and for the dependent care credit.
• For cash assistance programs, see 16.4 SSI, TANF, and housing assistance.

• A person who cares for your child in your home under your instructions is generally considered your "household employee."
• When employment begins: You and the caregiver must complete Form I-9 (employment authorization verification) no later than the first day of work. It is illegal to employ someone without work authorization. See 5.4 Starting a job.
• 2026 tax rules:
  • If you pay a household employee cash wages of $3,000 or more during the year, Social Security and Medicare taxes apply.
  • Social Security tax is 6.2% each for the employee and employer; Medicare tax is 1.45% each.
  • You are not required to withhold income tax; however, you may withhold it if the employee requests it and you agree.
  • You report the taxes on Schedule H attached to your tax return.
  • For 2026 wages, you must provide Form W-2 to the SSA by February 1, 2027, at the latest.
• Your state may also have unemployment insurance and other employer obligations.

• Amount: up to $2,200 for each qualifying child.
• Refundable portion (ACTC): If your tax liability is low, you may receive a refund of up to $1,700 per child. You must have at least $2,500 of earned income.
• Income limit: The credit gradually decreases if your annual income exceeds $200,000 ($400,000 for joint returns).
• SSN requirement: You (or you or your spouse on a joint return) and each child must have a valid SSN for employment in the United States. The SSN must be obtained before the return's due date, including extensions.
• Requirements for the child:
  • under age 17 at the end of the year
  • your son, daughter, stepchild, or foster child; your sibling; or a descendant of any of them (for example, a grandchild or niece/nephew)
  • lived with you for more than half the year
  • did not provide more than half of their own support
  • was claimed as your dependent on your tax return
  • a U.S. citizen, U.S. national, or resident alien for tax purposes
• How to claim it: List the children on Form 1040 and attach Schedule 8812.
• For returns claiming EITC or ACTC, the IRS cannot issue the refund before mid-February.

• A credit of up to $500 per person for children or relatives who do not meet the Child Tax Credit requirements.
• The person must be claimed as a dependent and must be a U.S. citizen, U.S. national, or resident alien.
• For this credit, the person may have an SSN, ITIN, or adoption taxpayer identification number (ATIN).
• The credit begins to decrease when income exceeds $200,000 ($400,000 for joint returns).
• For an ITIN, see 15.2 Tax identification number.

• Available for care expenses you pay while you work or look for work.
• Who qualifies: a child under age 13 whom you support; or a disabled spouse or relative who cannot care for themselves.
• Expense limit: $3,000 for one qualifying person, or $6,000 for two or more.
• Rate: Starting with the 2026 tax year, between 20% and 50% of expenses. In previous years, the maximum rate was 35%.
  • 50% if adjusted gross income is $15,000 or less
  • above $15,000, the rate gradually decreases to 35%
  • it decreases again above $75,000 ($150,000 for joint returns), but does not fall below 20%
• Credit amount: up to $1,500 for one person, or $3,000 for two or more people.
• The credit is nonrefundable; it only reduces your tax liability.
• Requirements: You (and your spouse on a joint return) must have earned income. If married, you generally must file a joint return.
• Who cannot be the caregiver: your spouse, your dependent, your child under age 19, or the parent of a child under age 13.
• Food, lodging, clothing, education, and entertainment expenses do not count.
• How to claim it: Complete Form 2441 and attach it to your return. You must provide the caregiver's or childcare center's name, address, and tax identification number (EIN or SSN). You can request this information from the caregiver using Form W-10.

• A new type of individual retirement account for children. A parent, guardian, or authorized person opens the account.
• Who qualifies: children who have not turned 18 before the end of the calendar year in which the election is made and who have a valid SSN.
• $1,000 government contribution: The federal government will deposit $1,000 one time for children born between January 1, 2025 and December 31, 2028 who are U.S. citizens and have a valid SSN.
• How to open one: Sign in to your IRS account with ID.me and submit Form 4547. The process takes 5–10 minutes. The child's SSN, date of birth, and address are required.
• Contributions: No money could be deposited into the account before July 4, 2026. Individuals may contribute up to a total of $5,000 per year. An employer may contribute up to $2,500 per year; this amount is included in the $5,000 limit.
• Withdrawals: As a general rule, money cannot be withdrawn before January 1 of the year in which the child turns 18. After that date, the account is subject to traditional individual retirement account (IRA) rules.

• Childcare.gov — search for childcare by state, license and inspection records, childcare assistance
  • Web: Your state's resources
• Head Start Center Locator
  • Web: headstart.gov/center-locator
• IRS free tax assistance (VITA) — free tax return preparation for eligible low-income families
  • Web: Find a VITA site
• IRS account and Trump Account election
  • Web: irs.gov/trumpaccounts
• For the tax return process, see 15.3 Tax return.

• Enrolling without checking the childcare provider's license status and inspection reports.
• Paying a caregiver more than $3,000 per year without reporting household employer taxes.
• Failing to obtain the caregiver's name, address, and tax identification number, making it impossible to complete Form 2441.
• Using the same care expense both in an employer account (FSA) and for the care credit.
• Obtaining the child's SSN after the tax return deadline and missing the Child Tax Credit.
• Claiming the Child Tax Credit when the child has only an ITIN. In this case, only the $500 ODC may be available.
• Failing to submit Form 4547 for a Trump Account and missing the $1,000 contribution.

• I have an ITIN and my spouse has an SSN. Can we receive the Child Tax Credit? According to the IRS, on a joint return, you or your spouse and each child must have a valid SSN for employment. Check your situation using the IRS interactive tool or with a tax professional.
• My child was born this year. Can I claim the credit on this year's return? According to IRS Publication 501, a child born during the year is considered to have lived with you for more than half the year if the child lived in your home for more than half of the time the child was alive. A required hospital stay after birth does not affect this calculation. You must obtain the child's SSN before the tax return deadline.
• Can I claim the care credit for money I paid to my grandmother? You may claim it if the caregiver is not your dependent and is not the child's parent. You must enter the caregiver's tax identification number on Form 2441.
• Can I receive government assistance for childcare fees? Check your state's childcare assistance program. Requirements vary by state; select your state on Childcare.gov.
• Is the $1,000 for a Trump Account deposited automatically? No. You must make the election to open the account using Form 4547.
• How much is the refundable portion of the Child Tax Credit? For the 2026 tax year, up to $1,700 per child, provided you have at least $2,500 of earned income.

• Schedule 8812: Child Tax Credit form (PDF)
• Schedule 8812 instructions (PDF)
• Form 2441: Child and dependent care expenses (PDF)
• Form 2441 instructions (PDF)
• Publication 503: Child and dependent care expenses (PDF)
• Form W-10: Dependent care provider identification and certification (PDF)
• Publication 926: Household employer's tax guide (PDF)
• Publication 501: Dependents and filing information (PDF)
• Form 4547: Trump Account election (PDF)
• Form 4547 instructions (PDF)
• Childcare.gov state resources
• Find an IRS free tax assistance (VITA) site