Child Tax Credit vs Child and Dependent Care Credit: What's the Difference

The Child Tax Credit and the Child Care Credit sound almost the same. They're not. One is about who lives in your home. The other is about what you pay for someone to watch your kids while you work. You can claim both on the same tax return, and a lot of families miss the second one without ever knowing it was there.

You ran Turnout's free benefits scan, so you may already qualify for one or both. Before you file, here's what each credit actually does, in plain terms.

What's the difference between the Child Tax Credit and the Child Care Credit?

The Child Tax Credit is based on having a qualifying child under 17 living with you. The Child and Dependent Care Credit is based on what you spend on care for that child so you can work or look for work.

That's the core split. One looks at your household. The other looks at your spending.

Here's a quick side-by-side:

How the Child Tax Credit works

The Child Tax Credit lowers your tax bill by up to $2,200 per qualifying child for the 2025 tax year, according to the IRS. To claim it, your child has to be under 17 at the end of the year, live with you for more than half the year, and have a valid Social Security number.

There's an income limit. You get the full amount if you earn $200,000 or less, or $400,000 or less if you're married and filing jointly. Earn more than that, and the credit starts to shrink.

Part of this credit can come back to you as money, even if you don't owe much in taxes. That refundable piece is called the Additional Child Tax Credit, and it's worth up to $1,700 per child for 2025, the IRS says. You need at least $2,500 in earned income to qualify for the refundable part.

So if you have two kids under 17, you could lower your tax bill by up to $4,400. If your bill is already low, up to $3,400 of that could come back to you as a refund.

How the Child and Dependent Care Credit works

The Child and Dependent Care Credit is based on what you actually spent on care, not on who lives with you. You can claim it if you paid for childcare so you could work or actively look for work, the IRS explains.

Here's how the math works. You can count up to $3,000 in care costs for one child, or up to $6,000 for two or more children. Then you get back a percentage of that amount. The percentage depends on your income: lower earners get a bigger percentage, higher earners get a smaller one.

The child being cared for usually has to be under 13. The care has to let you work, so a babysitter while you're at your job counts, but a babysitter for date night doesn't. This credit also covers care for a dependent who can't care for themselves, not just young kids.

One real example. Say you paid a daycare $5,000 last year for your two kids while you worked. You could count up to $6,000 in expenses, so all $5,000 counts. Depending on your income, you might get back 20 to 35 percent of that, somewhere between $1,000 and $1,750 off your tax bill.

This credit only lowers what you owe. It doesn't come back as a refund the way part of the Child Tax Credit can.

Can you claim both credits on the same return?

Yes. If you qualify for both, you can claim both on the same tax return, and many families do. This is the part people miss.

The two credits don't cancel each other out. The Child Tax Credit looks at the fact that your child lives with you. The Child and Dependent Care Credit looks at the money you spent on care. Those are two different things, so you can get both.

Picture a parent with one 4-year-old in daycare. That child is under 17 and lives at home, so the Child Tax Credit applies. The parent also paid for daycare to keep their job, so the Child and Dependent Care Credit applies too. Same child. Same return. Two credits.

A lot of families claim the first one, feel done, and walk away from the second. If you paid for care while you worked, don't stop at one.

FAQs

What's the age limit for the Child Tax Credit?

Your child has to be under 17 at the end of the tax year. A child who turns 17 during the year doesn't qualify for the Child Tax Credit, though they may qualify you for the Credit for Other Dependents, worth up to $500.

What are the income limits for the Child Tax Credit?

You get the full credit if your income is $200,000 or less, or $400,000 or less if you're married and filing jointly. Above those amounts, the credit gets smaller as your income goes up.

How do I claim the Child Tax Credit?

You claim it on Form 1040 by listing your children as dependents and attaching Schedule 8812. If you want a walkthrough, here's a step-by-step guide to Schedule 8812. If you use tax software or work with someone who prepares your return, they'll handle the form once you tell them about your kids and their Social Security numbers.

What if my child is 13 or older? Can I still get the Child Care Credit?

Usually not for that child. The Child and Dependent Care Credit is for care of a child under 13. There's an exception if your child is older but can't care for themselves because of a disability, and lives with you for more than half the year.

Does the Child Care Credit come back as a refund?

No. The Child and Dependent Care Credit only lowers the tax you owe. It doesn't pay out as a refund if your bill is already zero. The Child Tax Credit is the one with a refundable piece, up to $1,700 per child.

Your next step

Pull together two things before you file: your kids' Social Security numbers, and a total of what you paid for childcare last year. With those in hand, you can check whether you qualify for one credit or both.

Not sure where you stand? Radar by Turnout, a free benefits scan shows you the full picture of what your family may qualify for, and we can help you handle the next steps from there.