4. Child and Dependent Care Tax Credit
Families who pay for child or dependent care in order to work or look for work may be eligible for money or reduced taxes from both the federal and state governments. The amount you get is generally higher if your expenses are higher. The state credit is limited to families with under $100,000 income per year. The federal limit is $438,000 annual income.
In 2021, the American Rescue Plan expanded the child and dependent care tax credit. For the 2021 tax year, families can claim a credit worth 50% of their child care expenses, which can be up to $16,000 for two or more kids and $8,000 for families with one child. So, families with two kids who spent at least $16,000 on day care in 2021 can get $8,000 back from the IRS through the expanded tax credit.
More information is available at https://www.irs.gov/newsroom/child-and-dependent-care-credit-faqs