What is the earned income adjustment for the Child Care Credit if I'm a full-time student or disabled?
If you were a full-time student for 5 months of 2025 or were disabled, the IRS considers you as having worked and had earned income for those months for purposes of the Child Care Credit (even if you didn't actually work or earned very little).
You're allowed a specific monthly earned income amount, and this helps increase your credit. To benefit from this, you'll just need to figure out the adjustment amount that applies to you.
How to calculate your adjustment:
Example: You were a student from January until May and you got a job starting in March, where you earned $200, $700, and $700 in the months from March to May. You have one qualifying child, so your amount of earned income the IRS allows (Step 3) is $250. The table below shows how you'd calculate your adjustment:
You're allowed a specific monthly earned income amount, and this helps increase your credit. To benefit from this, you'll just need to figure out the adjustment amount that applies to you.
How to calculate your adjustment:
- Determine which months of 2025 you were a full-time student or disabled. You'll only be calculating a monthly adjustment amount for these months.
- Determine how much earned income, if any, you had in each of the months in Step 1. It's ok if you didn't work or earn any money. In this case, your earned income would be $0. Continue to Step 3.
- Determine the amount of earned income the IRS allows per month:
- If you had one qualifying person cared for, it's $250.
- If you had 2 or more qualifying people cared for, it's $500.
- Calculate your Adjustment: For each month from Step 1, take the earned income amount from Step 3 (either $250 or $500) and subtract your monthly income amount from Step 2. This is your adjustment amount for that month. Note, if this amount is less than 0, it's limited to 0. Only include positive amounts.
- Repeat Step 4 for each month in Step 1.
- Add all of your adjustment amounts from Step 4 together.
- Enter the total amount from Step 6 on this screen. If your total is zero, you have no adjustment and don't need to enter anything.
Example: You were a student from January until May and you got a job starting in March, where you earned $200, $700, and $700 in the months from March to May. You have one qualifying child, so your amount of earned income the IRS allows (Step 3) is $250. The table below shows how you'd calculate your adjustment:
| Month | Inc | Adjustment |
|---|---|---|
| Jan | $0 | $250 - $0 = $250 |
| Feb | $0 | $250 - $0 = $250 |
| Mar | $200 | $250 - $200 = $50 |
| April | $700 | $250 - $700 = limited to $0 |
| May | $700 | $250 - $700 = limited to $0 |
| TOTAL | $555 |
