Child & Dependent Care Tax Credit

Minnesota provides a refundable Child and Dependent Care Tax Credit that helps offset the high cost of child care for some low- and moderate-income families.

However, the size of the credit doesn’t reflect rising child care costs and the scope of its reach is limited. During the 2016 legislative session, lawmakers included an increased and expanded Child and Dependent Care Tax Credit in their final tax bill to help more low- and mid-income families afford the high cost of care. Families with one dependent would be able to access a new maximum credit of $1,050 (up from $720) and the maximum adjusted gross income to qualify for the credit would be $44,900 (up from $39,400). Families with two or more dependents would be able to access a new maximum credit of $2,100 (up from $1,440) and the maximum adjusted gross income to qualify for the credit would be $51,800 (up from $39,400). As of June 1, 2016, Governor Dayton had not signed the tax bill into law.

Children’s Defense Fund-Minnesota supports improving the Child and Dependent Care Tax Credit, including by increasing the size of the credit and expanding eligibility to reach more low- and moderate-income families so they can afford safe, consistent, high-quality child care that meets their needs.

Learn more about the Child Care Assistance Program.