Increased Child Care Tax Benefits in 2021
With the reduced number of infections and better news for the COVID–19 pandemic, millions of Americans are returning to work. Many parents are making arrangements for childcare. The American Rescue Plan Act (ARPA) includes several benefits that will help parents as they return to work.
The ARPA benefits include an increased child and dependent care credit, higher limits for a flexible spending account (FSA), expansion of the earned income tax credit (EITC) and greater benefits under Advance Child Tax Credits.
1. Increased Child and Dependent Care Credit — ARPA makes it easier for parents to provide child and dependent care. The tax credit for care of qualified dependents is increased from 35% to 50%...MORE