Bean Counting Firm Inc

Important Update for Tax Clients: Enhanced Child and Dependent Care Tax Credit!

The OBBBA (Opportunity for a Better Budget and Balanced America Act) has introduced major improvements to the Child and Dependent Care Tax Credit (CDCTC) — and it could mean more money back in your pocket this tax season!

What’s New?
• The maximum credit rate has increased from 35% to 50%.
• The income-based phase-down has been restructured, meaning most families now qualify for a larger percentage of their eligible expenses.

Here’s a look at the updated credit rate based on your Adjusted Gross Income (AGI):

AGI $15,000 Previous Rate 35% New Rate 50%

AGI $25,000 Previous Rate 30% New Rate 45%

AGI $45,000–$206,000 Previous Rate 20% New Rate 35%

AGI Over $206,000 Previous Rate 20% New Rate 20%

Filing Requirements:
• Married couples must file jointly to claim the credit.
• Separated spouses may qualify as "unmarried" under certain conditions.

This is a great opportunity for families to maximize their tax savings. Be sure to keep all receipts and documentation for childcare and dependent care expenses!

Got questions? We’re here to help, contact Bean Counting Firm Inc at 530-893-0859!