State Tax Credits for Dependent Care Expenses


This is a state version of the Federal Child and Dependent Care Credit in which the tax filer receives a credit for care expenses incurred so that they are able to work elsewhere.   Home care or adult day care costs are examples of work-related expenses that are eligible.


Most states simply allow tax filers to deduct a percentage of their federal tax credit from their state tax returns. For example, the Delaware Dependent Care Tax Credit is 50% of the Federal amount. If your Federal credit is the maximum $1,050, you can also deduct $525 for your state taxes. Note that many states apply a range of percentages based on your income.  For example, instead of 50%, those with higher incomes might be allowed 35% of their Federal credit.


Twenty-five states have a Dependent Care Credit.  The table below includes the income limit, maximum credit amount and the method by which the state calculates the credit amount.

State	Income Limit with 1 Dependent	Annual Max Benefit for 1 Dependent	Benefit Calculation
Arkansas	No limit	$210	20% of federal credit
California	$100,000	$525	34-50% of federal credit, depending on income
Colorado	$60,000	$525	10-50% of federal credit, depending on income
Delaware	No limit	$525	50% of federal credit
District of Columbia	No limit	$336	32% of federal credit
Georgia	No limit	$315	30% of federal credit
Hawaii	No limit	$600	15-25% of eligible expenses, depending on income
Iowa	$45,000	$788	30-75% of federal credit, depending on income
Kansas	No limit	$263	25% of federal credit
Kentucky	No limit	$210	20% of federal credit
Louisiana	No limit	$1,050	10-50% of federal credit
Maine	No limit	$452	25% of federal credit
Maryland	No limit	$484	Deduction of eligible expenses
Minnesota	$34,070	$720	100% of federal credit , depending on income
Montana	$22,800	$144	Deduction of eligible expenses
Nebraska	No limit	$1,050	25-100% of federal credit, depending on income
New Mexico	$21,424	$480	40% of eligible expenses
New York	No limit	$1,155	20-110% of federal credit, depending on income
North Carolina	No limit	$390	7-13% of eligible expenses, depending on income
Ohio	$40,000	$1,050	25 or 100% of federal credit, depending on income
Oklahoma	No limit	$210	20% of federal credit
Oregon	$40,000/year	None	8-40% of eligible expenses, depending on income
Rhode Island	No limit	$263	25% of federal credit
South Carolina	No limit	$210	7% of eligible expenses
Vermont	Refundable credit limit of $30,000 OR Nonrefundable credit with no income limit.	$525	Refundable 50% of the federal credit Nonrefundable 24% of the federal

It can be difficult to determine how to structure one’s expenses and choose between the available tax credits and deductions to get the greatest tax savings. Online tax preparation services such as TurboTax Calculators and Tips can greatly facilitate this process as they enable a tax filer to easily examine multiple scenarios and choose the best approach.