Per Diem Rates from the U.S. General Services Administration

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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").

Per Diem Rates

2021 Child and Dependent Care Credit

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If you hired someone to take care of your children age 12 or under, or other dependent while you work, you may qualify for a tax credit for the expenses. The credit is generally available to the extent you have earning from employment, even working part-time. You may even claim the credit while working from home and pay someone to care for your child while you're there.

For 2021, the credit is refundable, but only if your principal residence (or your spouse's if filing jointly) is within the U.S. for more than half the year. There is a special exception for military personnel.

U.S. military personnel who are stationed outside the United States on extended active duty are considered to have their main home in one of the 50 states or the District of Columbia for purposes of qualifying for the refundable portion of the credit. For this purpose, extended active duty means any period of active duty pursuant to a call or order to active duty for a period in excess of 90 days or for an indefinite period

Qualifying for the Child and Dependent Care Credit:

To qualify for the credit, you must:

1. Incur qualifying expenses to care for a qualifying person, so that you can work. Expense that you incur while looking for work qualify for the credit, but you must have earnings for the year. Tax-free reimbursement received from an employer reduce your qualifying expenses.
2. Have earned income for the year. If married, both persons generally must work. There is an exception if one person is a full-time student of incapacitated.
   1. Earned income rule for married couples: If either spouse earns less than the maximum $8,000 or $16,000 credit base, the base is limited to the smaller earned income. However, each month either spouse is a full-time student or is disabled, that spouse is considered to have earned income of $250 if care expenses are incurred for one dependent, or $500 for two or more dependents, even if th espouse had no earnings or earnings under $250/$500 for the month.
3. File jointly if you are married, unless you're separated.
4. Hire a care provider other than a person you may claim as your dependent. Also, no credit may be claimed for payments made to:
   1. your child under 19 years of age at the end of the tax year, whether or not you may claim the child as a dependent,
   2. your spouse, or
   3. the other parent (who is not your spouse) of your child under age 13 whom you are claiming as your qualifying person.
5. Report on your tax return the name, address, and taxpayer identification number (Social Security number for individuals) of the child-care provider.

Figuring the Child and Dependent Care Credit

For 2021, the child and dependent care credit is increased and fully refundable (if the credit exceeds your tax liability, the excess is refunded to you). Qualifying expenses taken into account in calculating the credit are up to $8,000 for one qualifying individual and up to $16,000 for two or more qualifying individuals. If you receive employer-financed dependent care, tax-free reimbursements reduce t he $8,000 or $16,000 base.

Household Employer:

If you pay someone to come to your home and care for your dependent or spouse and you can control not only what work is done, but how it is done, you may be a household employer. If you are a household employer, you'll need an EIN and you may have to pay employment taxes.

If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. Self-employed persons who are in business for themselves are not household employees. Usually, you aren't a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business.

Dependent Care Assistance:

The American Rescue Plan Act provides a one-year increase in the maximum exclusion for qualifying day-care services provided by your employer, to $10,500 for 2021 ($5,250 if married filing separately). Prior to 2021, the exclusion limit was $5,000 ($2,500 if married filing separately). The limit will go back to $5,000 (or $2,500) in 2022 unless the law is changed.