What is the Enhanced dependent care credit?
The enhanced dependent care credit under the One Big Beautiful Bill Act increases the maximum credit rate to 50% of qualifying childcare expenses for lower‑income families, subject to income‑based phase‑downs and a 20% minimum rate for higher‑income taxpayers. This credit applies to work‑related care expenses for children under age 13 and for dependents of any age who are physically or mentally unable to care for themselves, with maximum qualifying expenses of $3,000 for one qualifying individual or 6,000 for two or more. Families can coordinate with the Child & dependent tax credits for maximum savings.
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