Don’t sleep on the dependent care credit

Description

Abstract: There’s good tax news — and bad tax news — for parents who pay someone to watch their young children while they are at work. This article explains that under the American Rescue Plan Act, the dependent care credit for qualified expense was generally enhanced, providing bigger tax savings on 2021 returns. It also notes that the revamped credit is completely phased out for some high-income taxpayers. A sidebar discusses other options for the dependent care tax credit.