How to Claim Daycare Expenses on Your Tax Return

To claim daycare expenses on your taxes, file IRS Form 2441 with your Form 1040 and take the Child and Dependent Care Credit. For the 2026 tax year, the credit covers 20% to 50% of up to $3,000 in care costs for one qualifying child or $6,000 for two or more, with the percentage tied to your adjusted gross income.¹

Do You Qualify to Claim Daycare Costs

You can claim the credit if you paid for care so you (and your spouse, if married) could work or look for work. The child must have been under 13 when the care was provided. A spouse or other dependent of any age who cannot care for themselves also counts, provided they lived with you more than half the year.²

Both you and your spouse need earned income. Wages, salary, tips, and net self-employment earnings count; unemployment does not. If one spouse is a full-time student or unable to care for themselves, that spouse is treated as earning $250 per month, or $500 per month if you have two or more qualifying individuals.²

One filing status rule trips people up: married filing separately generally disqualifies you. A narrow exception applies if you lived apart from your spouse for the last six months of the year and meet the other conditions in Publication 503.²

Which Daycare Payments Count

The IRS separates care expenses from education expenses, and the line shifts with your child’s age. These payments qualify:¹

Licensed daycare centers, nannies, babysitters, and au pairs.
Nursery school and preschool. The full cost of programs below the kindergarten level counts, including meals and educational activities bundled in.
Before- and after-school programs for children in kindergarten and up, when the care is outside school hours.
Summer day camps, including specialty camps for sports or computers.

These don’t:¹

Overnight camps, at any cost, for any reason.
Kindergarten or higher tuition, which the IRS treats as education.
Summer school and tutoring.
Separate charges for food, clothing, or entertainment. Small amounts folded into a general daycare fee are fine.

Paying a Relative

You can pay a relative and still claim the credit, but not everyone qualifies as a provider. You cannot count payments to:³

Your spouse.
The parent of your qualifying child if that child is under 13.
Anyone you claim as a dependent.
Your own child who was under 19 at the end of the tax year.

Paying a grandparent, an adult sibling who isn’t your dependent, or another adult relative is fine, as long as you report their identifying information on your return.

How Much You’ll Actually Get Back

Multiply your eligible expenses by a percentage based on your AGI, up to the $3,000 or $6,000 cap. For 2026, the percentage ranges from 20% to 50% and works in two tiers:⁴

The rate starts at 50% for AGI of $15,000 or less, then drops one percentage point per $2,000 of income above that, bottoming at 35% around $45,000 of AGI.
The 35% rate holds until AGI reaches $75,000 for single filers, or $150,000 for joint filers. Above those thresholds, it falls one percentage point per $2,000 (or $4,000 for joint filers) until it reaches the 20% floor.

In dollar terms: a family with AGI under $15,000 and two children in daycare could claim up to $3,000. A married couple filing jointly at $100,000 AGI gets 35%, or up to $2,100 for two children. At the 20% floor, the credit tops out at $600 for one child or $1,200 for two.

The credit is nonrefundable. It can zero out your tax bill but won’t produce a refund on its own, and any unused portion is lost.

Filing the Return: Form 2441 and Provider Details

You claim the credit on Form 2441, which attaches to your Form 1040.⁵ The form asks for each provider’s name, address, and taxpayer identification number, plus the total you paid and the qualifying person cared for. Tax software fills this out from your entries.

The TIN requirement matters. Without it, the credit is denied unless you can show you made a genuine effort to obtain it.⁴ For a commercial daycare, the TIN is the facility’s EIN. For an individual provider, it’s their Social Security number. Use IRS Form W-10 to request this information in writing and keep the completed form with your receipts.

If a provider refuses to give their TIN, you can still claim the credit. Complete Form 2441 with what you have, write “See Attached Statement” in the TIN column, and attach a short note explaining that you asked but the provider wouldn’t supply the number. The IRS treats that as meeting the due diligence requirement.⁶

Keep copies. If provider details on Form 2441 don’t match IRS records, expect a letter within a few weeks of filing asking you to clarify. E-filed returns typically process within 21 days; paper returns take six weeks or more.⁷⁸

If You Also Use a Dependent Care FSA

If your employer offers a Dependent Care FSA, you can exclude up to $7,500 in dependent care benefits from your 2026 income, or $3,750 if married filing separately.⁹ The FSA and the credit interact directly: every dollar you exclude through the FSA reduces the expense limit available for the credit by the same amount. Run $6,000 through the FSA with two children, and your $6,000 credit cap becomes zero.

For most families the FSA is the stronger option, because excluding income at your marginal rate saves more than the credit percentage. Lower-income families who now qualify for the 50% credit should compare both approaches before locking in an FSA election.

If you received any dependent care benefits during the year, you must complete Part III of Form 2441 even if you’re not claiming the credit. Any benefits above the excludable limit are added back to your taxable wages.⁵

Separated or Divorced Parents

When parents live apart, only the custodial parent can claim the credit, even if the noncustodial parent claims the child as a dependent using Form 8332.² The dependency claim and the care credit follow different rules. The custodial parent is the one the child spent the greater number of nights with during the year. If you’re the noncustodial parent paying for daycare during your visitation time, those payments generally won’t support a credit on your return.

State Credits

Some states offer their own childcare tax credit on top of the federal one. Rules vary widely: some states use a percentage of the federal credit, others use their own income-based formula or a flat amount. Check your state department of revenue’s site for the form and eligibility rules that apply where you file.

1
Internal Revenue Service. Publication 503 – Child and Dependent Care Expenses
2
Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit
3
Internal Revenue Service. Child and Dependent Care Credit Information
4
Office of the Law Revision Counsel. 26 USC 21 – Expenses for Household and Dependent Care Services Necessary for Gainful Employment
5
Internal Revenue Service. Instructions for Form 2441 – Child and Dependent Care Expenses
6
Internal Revenue Service. Child and Dependent Care Credit and Flexible Benefit Plans
7
Internal Revenue Service. Processing Status for Tax Forms
8
Internal Revenue Service. Internal Revenue Service – Refunds
9
Office of the Law Revision Counsel. 26 USC 129 – Dependent Care Assistance Programs