Although Illinois does not have a daycare tax credit, families can still access the federal Child and Dependent Care Credit, Dependent Care Assistance Plans (DCAPs), and the Illinois Child Tax Credit to help mitigate out-of-pocket daycare costs.
The federal Child and Dependent Care Credit enables families to claim certain childcare expenses for a child under age 13 or a qualifying dependent who cannot care for themself. As of 2024, parents were able to claim up to $3,000 in expenses for one dependent or up to $6,000 for two or more dependents, for a credit of 20%-35% depending on income.
Illinois residents can also claim the new Illinois Child Tax Credit if they’re eligible for the state’s Earned Income Tax Credit (EITC) and have a qualifying child under the age of 12. For tax year 2024, the refundable credit amount is 20% of the state EITC; for tax year 2025, it’s 40% of the state EITC. It’s projected to inject over $600 million into the state economy.
Many Illinois employers offer DCAPs, which let workers set aside up to $5,000 in pre-tax income to pay for childcare. The money may be used for daycare centers, after-school programs, or in-home sitters. DCAPs also reduce taxable income, which makes them one of the most tax-efficient ways to save on childcare expenses. Employers may also benefit from parent-related tax credits that allow more businesses to support working parents.
Yes. Parents may claim daycare and other childcare expenses on their federal tax return using IRS Form 2441. Eligible expenses include day care, preschool, and after-school programs used so parents can work or seek work. The Illinois Child Tax Credit can be claimed on the state return for qualifying families, providing additional relief beyond federal savings. Together, these programs function as a powerful form of dependent care assistance for Illinois families.
In addition to the benefits for childcare credits, families in Illinois might also qualify for the following benefits:
These programs demonstrate the state’s commitment to reducing childcare costs and helping families stay in the workforce.
Discover why families trust Little Newtons in Elmwood Park for exceptional early childhood education. Since 2018, we’ve provided a nurturing, learning-focused environment designed to help children ages 6 weeks to 5 years grow, explore, and succeed. Contact Little Newtons today at 708-395-5590 to schedule a tour.
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