Child and Dependent Care Tax Credit (CDCTC): Temporary Expansion for 2021 Under the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) [April 7, 2021] [open pdf - 829KB]
From the Document: "The child and dependent care tax credit (CDCTC) can help to partially offset working families' child care expenses. The American Rescue Plan Act (P.L. 117-2; ARPA) provided a temporary expansion of the CDCTC for 2021. This Insight summarizes the temporary change, highlighting the credit amount for 2021 before and after the temporary expansion. Beyond the CDCTC, working families may also be eligible to receive tax-free employer-sponsored child care benefits, often in the form of a flexible spending arrangement/account (FSA). ARPA increased the maximum amount of tax-free child care benefits employers could provide from $5,000 to $10,500 for 2021 [hyperlink]. This change is not discussed further in this Insight."
CRS Insight, IN11645
Congressional Research Service: https://crsreports.congress.gov/