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Common questions on Form 2441 Child and Dependent Care Qualified Expenses in ProSeries

by Intuit•3• Updated 1 month ago

Future changes for tax year 2026

For tax years beginning after December 31, 2025, the One Big Beautiful Bill act will make changes to the applicable percentage and adjusted gross income thresholds for the 2441. These changes will go into effect for tax year 2026.

The following articles are the top questions referring to Child and Dependent Care Qualified Expenses (2441):

According to Tax Help for Form 2441:

"SPECIAL RULES FOR DIVORCED/SEPARATED PARENTS

If you were divorced, legally separated or lived apart from your spouse for the last 6 months of the year, then your child (even if the child is not your dependent) may be a qualified person, provided all of the following are true:

  1. You had custody of the child for a longer time during the year than the other parent.
  2. You or both you and the other parent provided over half of the child?s support during the year.
  3. You or both you and the other parent had custody of the child for more than half of the year.
  4. The child was under age 13 or was disabled and could not care for himself or herself.
  5. The other parent claims the child as a dependent because:

For more information refer to Form Instructions for Form 2441 and the Publication for Divorced or Separated Individuals."

For tax year 2021 only:

  • The expense limit has been raised to $8,000 for one individual, and to $16,000 for more than one.
  • The maximum credit percentage has been increased to 50% and the credit itself is refundable.
  • AGI phaseout has been significantly increased. This will be seen in the calculations on Form 2441.
  • See the 2021 IRS Pub. 503 for more information.

This temporary increase was not extended for tax year 2022 returns.

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