An $8,000 tax credit could be available for your 2021 child care costs. Here's who qualifies.

• Depending on your income, you may be eligible to deduct up to 50% of your child care expenses.
• The maximum amount for expenses that can be claimed under the child and dependent care tax credit in 2021 is $8,000 for one child or $16,000 for multiple children.
• Understanding how the tax credit is affected by your dependent care flexible-spending account is crucial.

If you incurred expenses for child care in the previous year, they could be beneficial when filing your 2021 tax return.

The "child and dependent care tax credit" was broadened in several ways, resulting in larger tax breaks for many households and increased access to the credit for more people.

It's worth checking whether you qualify for a tax break even if you were unable to get it in the past, according to Henry Grzes, lead manager for tax practice and ethics with the American Institute of CPAs.

Before marriage, couples should have a "money talk." In 10 out of every 10 consumers, they pay above the sticker price for a new car. Here are three ways to spend your tax refund this year.

According to ValuePenguin research, the average annual cost for an infant in full-time child care is $9,991. While the cost typically decreases as the child grows older, it can still be quite expensive, reaching thousands of dollars per year in certain locations and types of care.

The child and dependent care tax credit, which differs from the child tax credit, assists parents in covering the expenses of child care for children under 13 or adult dependents. The expanded version, enacted as part of the American Rescue Plan Act a year ago, is only applicable for the 2021 tax season and will revert to the previous rules for the 2022 tax season.

Although the general qualifications remained the same, the credit is only applicable for dependent care expenses that enable you to work or search for work (or possibly attend school). In general, you (and your spouse, for joint tax returns) must have earned income during the year to be eligible for the credit.

The credit for child tax expenses has increased for the 2021 tax return. For one child, the cap is now $8,000 (up from $3,000), and for two or more, it is $16,000 (up from $6,000). Additionally, you may be able to write off up to 50% (up from 35%) of those expenses, depending on your income. This means you could potentially get a maximum credit of $4,000 for one child and $8,000 for two or more.

The 2021 credit is refundable, meaning you can receive a refund even if you have no tax liability.

If you have a dependent care flexible-spending account, the expenses you cover through that FSA are not eligible for the tax credit because the money in that account is pre-tax and already provides a tax benefit.

Dave Alison, president and founding partner of Prosperity Capital Advisors in Cleveland, stated that double-dipping is not allowed.

Alison said that you can take advantage of both an FSA and tax credit for qualified expenses in 2021. If your expenses exceeded your FSA reimbursements, the difference could qualify for the tax credit, as long as the total doesn't exceed $8,000 (one child) or $16,000 (two).

If you spent $12,000 in care for your one child using FSA dollars, you could use $3,000 of the excess toward the tax credit.

The 50% share of expenses for 2021 is for taxpayers with income of $125,000 or lower. This means that in the above example, you would receive a credit of $1,500.

For income above $438,000, the credit disappears; for income between $183,000 and $400,000, it phases out until it reaches 20%.

From 2021, the percentage of people earning above $15,000 started decreasing gradually until reaching 20% at approximately $45,000.