Dependent care FSA vs. child care tax credit calculator (2026)
Enter your income, filing status and childcare costs. See what the dependent care FSA saves, what the child and dependent care credit is worth, and the split that saves the most.
2026 federal rules · Checked October 2026
- An estimate, not tax advice
- Nothing you enter leaves your browser
2026 limits
Compare the FSA and the credit
Example result
Married filing jointly, $120,000 income, 2 children, $18,000 in childcare
Fill in the form to see your own numbers. This one is a made-up family.
Take the credit
$2,100
estimated federal and payroll tax saved in 2026
Skip the FSA and claim the credit: 35% of $6,000 in childcare costs, worth about $2,100. That's $626 more than the FSA would save ($1,474).
FSA only
$1,474
$7,500 in the FSA, no credit
Credit only Saves most
$2,100
35% of $6,000
Best split
$2,100
Same as the winner: a mix doesn't add more
The math (example)
- Federal tax bracket
- 12% (estimated from the 2026 brackets)
- Federal income tax before credits
- about $10,040
- Most you can put in the FSA
- $7,500, set by the 2026 federal limit
- FSA payroll tax savings
- 7.65% of $7,500 = $574
- Credit rate at your income
- 35% of up to $6,000 in costs
- Credit before the tax limit
- 35% × $6,000 = $2,100
- FSA dollars reduce the credit's limit
- $6,000 − FSA dollars
The 2026 numbers
What the calculator uses, from the law and the IRS.
| Rule | 2026 |
|---|---|
| Dependent care FSA limit | $7,500 a household ($3,750 married filing separately) [1] |
| Childcare costs the credit counts | $3,000 for 1 child, $6,000 for 2 or more, minus FSA dollars [8] |
| Credit rate | 50% to 20%, by AGI (table) [2] |
| Who counts | Children under 13 (and a spouse or dependent who can't care for themselves) [3] |
| Payroll tax the FSA avoids | 7.65% (6.2% Social Security + 1.45% Medicare) [7] |
| Social Security wage base | $184,500 [7] |
| Standard deduction | $32,200 joint, $24,150 head of household, $16,100 single [6] |
| Child tax credit | $2,200 a child, up to $1,700 of it refundable [6] |
| AGI | Single, head of household | Married filing jointly |
|---|---|---|
| $15,000 or less | 50% | 50% |
| $15,001 to $43,000 | 49% to 36% | 49% to 36% |
| $43,001 to $75,000 | 35% | 35% |
| $75,001 to $103,000 | 34% to 21% | 35% |
| $103,001 to $150,000 | 20% | 35% |
| $150,001 to $206,000 | 20% | 34% to 21% |
| Over $206,000 | 20% | 20% |
Sources: U.S. Government Publishing Office; Internal Revenue Service. Data as of October 2026.
Questions about the FSA and the credit
What is the dependent care FSA limit for 2026?
$7,500 per household, or $3,750 if you're married filing separately, up from $5,000. Public Law 119-21 raised it for tax years starting in 2026, and it isn't indexed for inflation. Employers have to amend their plans to allow the higher amount, so check your plan's limit at open enrollment.
Can I use a dependent care FSA and the child care credit together?
Yes, but not on the same dollars. The credit counts up to $3,000 of childcare costs for one child or $6,000 for two or more, minus whatever you put in the FSA. With $7,500 in the FSA, nothing is left for the credit.
How much is the child and dependent care credit in 2026?
50% of the costs that count if your AGI is $15,000 or less. The rate drops a point for each $2,000 of income above that, to 35%, then falls again above $75,000 ($150,000 for joint filers), to 20%. On $6,000 of costs that's $3,000 down to $1,200. The credit can't be more than your income tax.
Which is better, the FSA or the credit?
It depends on your income. The FSA saves your tax bracket plus 7.65% in Social Security and Medicare tax on up to $7,500. The credit pays 20% to 50% on up to $6,000, but only against income tax you owe. In our example, a married couple earning $120,000 with two kids saves $2,100 with the credit and $1,474 with the FSA.
What if we're married filing separately?
The FSA limit is $3,750, and you generally can't take the credit. The IRS makes an exception if you're legally separated or lived apart from your spouse; see Publication 503.
What happens to FSA money I don't use?
It's forfeited, unless your plan lets you use it during a grace period in the next year. Elect only what you're sure to spend on care.
Sources
- 1.Public Law 119-21 (One Big Beautiful Bill Act), sections 70104, 70404 and 70405 U.S. Government Publishing Office. Accessed October 9, 2026.
- 2.Instructions for Form 2441 (2026), draft Internal Revenue Service. Accessed October 9, 2026.
- 3.Publication 503, Child and Dependent Care Expenses Internal Revenue Service. Accessed October 9, 2026.
- 4.Publication 15-B (2026), Employer's Tax Guide to Fringe Benefits: dependent care assistance Internal Revenue Service. Accessed October 9, 2026.
- 5.Working Families Tax Cuts: child and dependent care changes Internal Revenue Service. Accessed October 9, 2026.
- 6.Revenue Procedure 2025-32: 2026 tax brackets, standard deduction and child tax credit Internal Revenue Service. Accessed October 9, 2026.
- 7.Topic no. 751, Social Security and Medicare withholding rates Internal Revenue Service. Accessed October 9, 2026.
- 8.26 U.S.C. 21, Expenses for household and dependent care services necessary for gainful employment U.S. Government Publishing Office. Accessed October 9, 2026.
- 9.Instructions for Schedule 8812, Credits for Qualifying Children and Other Dependents Internal Revenue Service. Accessed October 9, 2026.
Plan for childcare costs
Childcare cost by countyFull-time prices at centers and home daycares, infant to school age.
Child care assistance by stateSubsidy income limits, copays and how to apply.Dependent care FSA limit 2026: $7,500, and when the credit is betterThe 2026 dependent care FSA limit is $7,500 per household, up from $5,000. See what counts, use-it-or-lose-it rules, and when the childcare credit saves more.
How much does childcare cost? Daycare prices by stateFull-time childcare for one child cost $6,552 to $15,600 a year in 2022, per federal data. See daycare prices by state and the 2026 ways to pay less.