State Tax Credits for Dependent Care Expenses

This information has been reviewed and is accurate for the tax year 2017, which is filed in the calendar year 2018.

Definition

These are state versions of the Federal Child and Dependent Care Tax Credit (CDCTC) in which the tax filer receives a credit for care expenses incurred so that they are able to work. Home care or adult day care costs are examples of work-related expenses that are eligible. Nursing home care and assisted living are examples of expenses that would not be eligible. Currently, the District of Columbia, as well as twenty-two states, offers tax credits for dependent care.

 

How They Work

Most states simply allow tax filers to deduct a percentage, which may range from 20% to 110%, of their federal tax credit from their state tax returns. For example, if the Dependent Care Tax Credit in your state is 50% of the Federal amount and your Federal credit is the maximum $1,050, you can also deduct $525 from 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.

 

States with Dependent Care Credits

The following states have Dependent Care Credits. Idaho, Massachusetts, and Montana (not listed below) do not offer dependent care credits, but they do offer tax deductions for child and dependent care costs.

States with Dependent Care Tax Credit 2018

1. Arkansas*
2. California
3. Colorado*
4. Delaware
5. District of Columbia
6. Georgia
7. Hawaii*
8. Iowa*
9. Kentucky
10. Louisiana*
11. Maine*
12. Maryland
13. Minnesota*
14. Nebraska*
15. New Mexico*
16. New York*
17. Ohio
18. Oklahoma
19. Oregon*
20. Rhode Island
21. South Carolina
22. Vermont*
23. Virginia

*Twelve of the above states allow individuals who work, but don’t owe income taxes to receive a refundable credit. These states are the ones with asterisks next to their names.