What is the Child and Dependent Care Credit?

The Child and Dependent Care Credit is designed to assist taxpayers with the costs of care for qualifying dependents while they are working or seeking employment. This credit specifically aims to cover expenses incurred for childcare, allowing parents or guardians to pursue their professional responsibilities without the financial burden of care costs. It is pertinent to note that this credit is nonrefundable, which means that it can reduce a taxpayer's liability to zero, but any excess credit cannot be refunded or received as a payment.

The focus on "care costs for dependents" emphasizes that it must relate to the care of children under the age of 13 or dependents who are physically or mentally incapable of self-care, reiterating its purpose centered on supporting working families. This differentiates it from other credits, such as those for education expenses or those aimed solely at low-income households.