1. What is the Keep Child Care Affordable Tax Credit?
Formerly known as the Early Learning Tax Credit, the District of Columbia Keep Child Care Affordable Tax Credit (Schedule ELC) is a refundable income tax credit that was enacted in the Fiscal Year 2020 Budget Support Act of 2019, effective September 11, 2019 (D.C. Law 23-0016) and is codified in D.C. Official Code § 47-1806.15. The Keep Child Care Affordable Tax Credit is available to taxpayers based on the amount of eligible child care expenses paid by the taxpayer per eligible child. For tax year 2021, the amount of the Keep Child Care Affordable Tax Credit cannot exceed $1,020 per eligible child.
2. Who qualifies as an “eligible child?”
An eligible child must --
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Be a dependent of the taxpayer; and
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Meet the following age requirements:
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A child under the age of 4 (age 0-3) as of December 31, 2021; or
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A child who reached the age of 4 between October 1 and December 31, 2021. See the chart below for further information.
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A child who reached the age of 4 between January 1 and September 30, 2021 is not an eligible child.
3. What are “eligible child care expenses?”
Eligible child care expenses are payments that you make to a qualified child development facility for child care services provided to an eligible child during the following time periods:
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For children born on or after October 1, 2017, the payments may be for child care services provided at any time during 2021.
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For children born between January 1 and September 30, 2017, the payments must be for child care services provided from January 1-August 31, 2021. (Payments for child care services provided from September 1-December 31, 2021 are not eligible child care expenses.)
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For children born between January 1, 2017 and September 30, 2017, payments for child care services provided at any time during 2021 are not eligible child care expenses.
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For children born between October 1, 2017 and December 31, 2017, the payments must be for child care services provided from January 1-August 31, 2021. (Payments for child care services provided from September 1-December 31, 2021 are not eligible child care expenses.)
For specific information, see the following chart:
Age of Child as of 12/31/2021 |
Date of Birth of Child |
Eligible Child for Tax Year 2021? |
Date(s) of Child Care Services Provided |
Eligible Child Care Expenses for Tax Year 2021? |
|
Under 1 |
1/1/2021- |
Yes |
1/1/2021-12/31/2021 |
Yes |
|
1 |
1/1/2020- |
Yes |
1/1/2021-12/31/2021 |
Yes |
|
2 |
1/1/2019- |
Yes |
1/1/2021-12/31/2021 |
Yes |
|
3 |
1/1/2018- |
Yes |
1/1/2021-8/31/2021 |
Yes |
|
3 |
1/1/2018- |
Yes |
9/1/2021-12/31/2021 |
No |
|
3 |
10/1/2018- |
Yes |
1/1/2021-12/31/2021 |
Yes |
|
4 |
1/1/2017- |
No |
1/1/2021-8/31/2021 |
No |
|
4 |
10/1/2017- |
Yes |
1/1/2021-8/31/2021 |
Yes |
|
4 |
10/1/2017- |
Yes |
9/1/2021-12/31/2021 |
No |
|
5+ |
1/1/2016 or earlier |
No |
1/1/2021-12/31/2021 |
No |
4. Why are expenses for child care services delivered to a three-year-old eligible child after September 30 not eligible child care expenses?
A child is eligible for enrollment in the District’s Pre-K program if that child becomes 3 years of age on or before September 30 of the program year. Accordingly, the statute provides that expenses for child care services delivered beginning in September of the program year to a child who became 3 years of age on or before September 30 are not eligible childcare expenses.
5. What is a “qualified child development facility?”
A child development facility is a center, home, or other structure that provides care and other services, supervision, and guidance for children, infants, and toddlers on a regular basis, regardless of its designated name. Child development facilities must be located in the District of Columbia and either be licensed by the District of Columbia Office of the State Superintendent of Educations (OSSE) or operated by either the federal government or by a private provider on federal property. Child development facility does not include a public or private elementary or secondary school engaged in legally required educational and related functions or a licensed pre-kindergarten education program.
6. I paid for my one-year-old daughter’s child care expenses in 2021, but I did not claim her as a dependent on my federal or District income tax return. Am I eligible to claim the Keep Child Care Affordable Tax Credit?
No. You must claim that child as a dependent on your 2021 federal and District income tax returns to claim the Keep Child Care Affordable Tax Credit for your child.
7. My ex-husband claimed our two-year-old son as a dependent on his federal income tax return even though our son lived with me in 2021, and I paid all his support including his child care expenses. Am I eligible to claim the Keep Child Care Affordable Tax Credit?
No. You are not eligible to claim the Keep Child Care Affordable Tax Credit if another person claimed your child as a dependent on his or her federal or District income tax return.
8. My ex-wife and I both contributed towards the payment of child care expenses for our three-year-old daughter in 2021. My ex-wife filed her District income tax return for tax year 2021 before I did and claimed the Keep Child Care Affordable Tax Credit for her portion of the child care expenses she paid for our daughter. Am I eligible to claim the Keep Child Care Affordable Tax Credit for my portion of the child care expenses?
No. You are not eligible to claim the Keep Child Care Affordable Tax Credit if another person received the Keep Child Care Affordable Tax Credit for your child.
9. My girlfriend and I have one-year-old twins. I paid the child care expenses for one child and my girlfriend paid the child care expenses for the other child. Are we both eligible to claim the Keep Child Care Affordable Tax Credit?
Yes. Assuming you and your girlfriend each claim a different child as a dependent on your federal and District income tax returns, you are each eligible to claim the Keep Child Care Affordable Tax Credit for child care expenses for that child.
10. I have custody of my two-year-old grandson and claimed him as a dependent on both my federal and District tax returns for tax year 2021. Am I eligible to claim the Keep Child Care Affordable Tax Credit for the eligible child care expenses I paid for him?
Assuming you paid eligible child care expenses and otherwise qualify for the Keep Child Care Affordable Tax Credit, you may claim the Keep Child Care Affordable Tax Credit for your grandson.
11. Do I have to apply for the Keep Child Care Affordable Tax Credit with the Office of Tax and Revenue (OTR) or another District agency?
No. You may claim the Keep Child Care Affordable Tax Credit before or after you file your District Income Tax Return (D-40). In order to claim the Keep Child Care Affordable Tax Credit you must complete the following:
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File Schedule ELC and Schedule S, Supplemental Information and Dependents.
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List the eligible child, as well as the eligible child’s date of birth and social security number and file them with your District Income Tax Return (D-40).
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Complete the Schedule U, Additional Miscellaneous Credit and Contributions.
12. I had no District taxable income in 2021. Can I still claim the Keep Child Care Affordable Tax Credit?
Yes. To the extent the amount of the Keep Child Care Affordable Tax Credit exceeds your income tax liability for 2021, that amount will be refunded to you.
13. I paid $24,000 in eligible child care expenses for my one-year old child in 2021. Can I claim the Keep Child Care Affordable Tax Credit for the full $24,000 I paid?
No. The amount of the Keep Child Care Affordable Tax Credit is capped at $1,020 per child per tax year for tax year 2021.
14. I had five children under the age of 3 enrolled in a licensed child development facility in 2021 and I paid more than $1,020 in eligible child care expenses for each child. Can I claim a $5,100 ELC ($1,020 x 5 children) for each of my children?
Yes. Assuming you otherwise qualify for the Keep Child Care Affordable Tax Credit, you may claim a $1,020 per eligible child for that tax year.
15. I had five children under the age of 3 but only one is enrolled in a licensed child development facility in 2021 and I and paid more than $10,000 in eligible child care expenses for that one child. Can I allocate the eligible child care expenses I paid for the one child among all my children and claim a $5,100 Keep Child Care Affordable Tax Credit ($1,020 x 5 children)?
No. You may not claim the Keep Child Care Affordable Tax Credit for your children who were not enrolled in a child development facility.
16. My daughter turned 3 years old on August 15, 2021 and was enrolled in a qualified childcare facility during 2021. Can I claim the Keep Child Care Affordable Tax Credit for child care expenses services provided to my daughter?
Maybe. Payments for child care services provided to your daughter on or before August 31, 2021 are eligible child care expenses and you may receive the Keep Child Care Affordable Tax Credit, up to $1,020. Payment for child care services provided to your daughter after August 31, 2021 are not eligible child care expenses and may not be included in computing the Keep Child Care Affordable Tax Credit.
17. My son turned 4 years old on August 15, 2021 and was enrolled in a qualified child care facility during 2021. Can I claim the Keep Child Care Affordable Tax Credit for childcare expenses for services provided to my son in 2021?
No. Your son is not an eligible child because he reached the age of 4 before September 30, 2021.
18. My three-year-old daughter was enrolled in two different qualified child care facilities in 2021. Can I claim two separate credits for childcare expenses payments I made to both facilities?
No. The amount of the Keep Child Care Affordable Credit is the lesser of the total amount of all eligible child care expenses you paid in 2021 or $1,020. You may, however, add the payments you made to both child care facilities in computing the total amount of eligible child care expenses you paid.
19. I was a resident of the District of Columbia for only part of 2021. Can I claim the Keep Child Care Affordable Tax Credit for my three-year-old daughter?
Yes, assuming you otherwise qualify for the Keep Child Care Affordable Tax Credit. However, the amount of the Keep Child Affordable Tax Credit must be prorated for the number of months that you lived in the District of Columbia. For example, if the total eligible child care expenses you paid for the taxable year were $5,000 and you were a resident of the District from January 1 through April 30, 2021, you would be entitled to the Keep Child Care Affordable Tax Credit in the amount of $255 ($1,020 divided by 1/4). If, however, the total eligible child care expenses you paid for the taxable year were $600 and you were a resident of the District from January 1 through September 30, 2021, you would be entitled to the Keep Child Care Affordable Tax Credit of $450 ($600 divided by 3/4).
20. Is there an income limit for taxpayers who are eligible to claim the Keep Child Care Affordable Tax Credit?
Yes. The income limits are adjusted each year for inflation based on the applicable consumer price index. A taxpayer is not eligible to claim the Keep Child Care Affordable Tax Credit if the taxpayer’s District taxable income exceeds the following amounts for tax year 2021:
Filing Status: |
Limit: |
|---|---|
|
Single |
$153,400 |
|
Head-of-Household |
$153,400 |
|
Married/Registered Domestic Partner Filing Jointly |
$153,400 |
|
Married/Registered Domestic Partner Filing Separately on the Same Return |
$153,400 |
|
Married/Registered Domestic Partner Filing Separately |
$76,700 |
21. My child’s child care provider was paid or received subsidies from the District of Columbia. Am I eligible to claim the Keep Child Care Affordable Tax Credit for the portion of my child’s child care that I pay myself?
You are not eligible to claim the Keep Child Care Affordable Tax Credit if any child care subsidies authorized under Chapter 4 of Title 4 of the D.C. Code during the taxable year are received or paid on behalf of your child. If you have questions about the child care subsidy program or whether child care subsidies were received or paid on behalf of your child, you may contact the Division of Early Learning of the Office of the State Superintendent of Education (OSSE) at (202) 727-5045 or visit https://osse.dc.gov/service/child-care-subsidyvoucher-program.
22. I still have questions about the Keep Child Care Affordable Tax Credit. How can I get more information?
Please visit MyTax.DC.gov to view your detailed account information. Should you have additional questions about this notice, please contact OTR’s Customer Service Center by sending a web message through MyTax.DC.gov or by calling (202) 727-4TAX (4829). When contacting OTR, please refer to the Notice Number which can be found in the top right of the notice.