If the taxpayer’s employer provides dependent care benefits under a qualified plan, the taxpayer may be able to take a credit or exclude these benefits from income. Special rules apply to self-employed individuals and married taxpayer’s filing separately.

A tax credit (refundable only for 2021) is available to some taxpayers for the expenses they incur for the care of a child, spouse, or other dependent while the taxpayer is gainfully employed (or is job seeking). In addition, employer dependent care assistance programs allow employees to exclude from income certain payments expended for child and dependent care. Tax return reporting is done on Form 2441, Child and Dependent Care Expenses.