Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246058 
Year of Publication: 
2021
Series/Report no.: 
Upjohn Institute Working Paper No. 21-344
Publisher: 
W.E. Upjohn Institute for Employment Research, Kalamazoo, MI
Abstract: 
The federal Child and Dependent Care Credit (CDCC) subsidizes child care costs for working families. Before 2021, the CDCC was nonrefundable, so only families with positive tax liability after other deductions benefited. I estimate how CDCC eligibility, benefits, and marginal tax rates would change if the credit were made permanently refundable, relative to 2020 CDCC parameters set to be restored in 2022. Under refundability, some 5 percent of single parents gain eligibility and receive on average over $1,000 annually. Eligibility increases are largest among Black and Hispanic households. Increases in marginal tax rates among moderate-income taxpayers are small.
Subjects: 
Child and Dependent Care Credit
marginal tax rates
eligibility
refundability
JEL: 
H24
J13
J22
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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