Not Just for Kids: Child and Dependent Care Credit Benefits for Adult Care

TitleNot Just for Kids: Child and Dependent Care Credit Benefits for Adult Care
Publication TypeReport
Year of Publication2023
AuthorsPepin, G, Truskinovsky, Y
InstitutionW.E Upjohn Institute for Employment Research
CityKalamazoo, Michigan
Keywordsadult care

The Child and Dependent Care Credit (CDCC) allows households to receive tax credits for certain
expenses associated with the care of a spouse or adult dependent who is incapable of self care, but
very few childless households claim the credit. We examine the value of the CDCC for qualifying
households caring for adults. We find that, as of 2016, more than 10 percent of individuals aged
50 to 65 had a coresident spouse or parent likely to be a qualifying individual for the CDCC. We
document how state and federal CDCC benefits decrease post-tax costs of typical caregiving
services, such as hiring a home health aide, across states. We find that a temporary expansion
during 2021 led to substantial decreases in post-tax care costs but generated considerable
differences in benefits across households with spouse and nonspouse qualifying individuals. We
discuss expected effects on taxpayers’ behavior of permanently expanding the CDCC and find
that making the credit refundable would nearly double the number of eligible spousal caregivers
aged 50 to 65, with eligibility rates increasing substantially among female, nonwhite, and lowincome caregivers.

Citation Key13216