What does the Child and Dependent Care Credit allow taxpayers to do?

The Child and Dependent Care Credit is designed specifically to assist working taxpayers by allowing them to claim expenses incurred for the care of qualifying dependents while they are employed. This encourages individuals to work by alleviating some of the financial burden associated with child or dependent care.

Claiming expenses for dependent care while working entails that the care must be necessary for the taxpayer to maintain (or look for) their job, effectively linking the credit to the need for childcare or care for a dependent in order to pursue employment. This credit does not apply to general expenses related to children or dependents, nor can it be claimed without regard to the taxpayer's employment status. Therefore, this credit is particularly focused on the connection between work and the necessity for care, reinforcing the rationale for its implementation.