When it comes to stimulus checks, for millions of Americans, the direct payments have just been sent to them - they don't need to do anything to get the money as long as they qualify. However, there is another stimulus out there, one worth up to $8,000, but because it is worth so much, it isn't just being distributed automatically - eligible recipients need to ask for it... and here's how.
It's called the Child and Dependent Care Tax Credit and is only available in 2021 as part of the American Rescue Plan, the same relief package that sent out the third stimulus check. According to the IRS, "The Child and Dependent Care Tax Credit is a credit allowed for a percentage of work-related expenses that a taxpayer incurs for the care of qualifying persons to enable the taxpayer to work or look for work."
What it does is help parents and/or caretakers struggling financially during the pandemic by assisting them with costs related to parenting or caretaking. For every family with an income of $125,000 or less, the credit will cover 50% of qualifying expenses up to $8,000 associated with the care of a child under 13 or a spouse, parent or other dependent who is unable to care for themselves. If a family is caring for two or more eligible dependents, they could get up to 50% of $16,000 in expenses. For families earning between $125,000 and $183,000, it will cover up to 20%.
However, to get it, a form must be filled out. It is IRS Form 2441 and along with completing it, you must prove that you have earned income from a job, and provide information about the care expenses that you need help covering.
Also, note that this is a tax credit, which is good news because it means it is dollar for dollar, so a credit of $8,000 will reduce your tax bill by $8,000, as opposed to a deduction, where an $8,000 deduction might only reduce your bill by $1,000.
Learn more about the credit here.