Child & Dependent Care Credit Calculator 2026
Your 2026 child and dependent care credit under the new 50% / 35% / 20% schedule and $3,000 / $6,000 expense caps, compared with the $7,500 dependent care FSA — which combination saves more at your income.
| Credit percentage at your AGI | — |
|---|---|
| Expenses that count | — |
| Credit without an FSA | — |
| If you use the FSA | — |
| Credit on expenses left after the FSA | — |
| Best combination | — |
| Maximum FSA you could elect in 2026 | — |
In short
From 2026 the child and dependent care credit is 50% of up to $3,000 / $6,000 of care expenses at AGI of $15,000 or less, falling one point per $2,000 of AGI to 35% (around $45,000) and then, above $75,000 ($150,000 joint), one point per $2,000 ($4,000 joint) to a 20% floor. The dependent care FSA limit rises to $7,500; FSA dollars reduce the credit's expense cap, so compare the FSA's all-in tax rate with your credit percentage.
Who this is for: US working parents paying for daycare who must choose between the credit and a dependent care FSA at open enrolment.
The bigger 2026 child and dependent care credit
- New rates from 2026: the credit is 50% of eligible expenses for AGI up to $15,000, falling one point per $2,000 of AGI to 35% (reached at about $45,000), staying at 35% until $75,000 ($150,000 joint), then falling one point per $2,000 ($4,000 joint) to a floor of 20% (reached at about $105,000 / $210,000).
- Expense caps unchanged: $3,000 for one qualifying person, $6,000 for two or more — so the maximum credit is $1,500 / $3,000 at 50% and $600 / $1,200 at 20%.
- Dependent care FSA: the exclusion rises from $5,000 to $7,500 in 2026. FSA dollars escape federal income tax, FICA and usually state tax, but every FSA dollar reduces the expense cap for the credit.
- Which wins: compare the FSA's all-in rate (marginal federal + 7.65% + state) with the credit percentage. Above roughly $75,000 of AGI the FSA usually wins; low-income families with the 50% credit should take the credit.
- The credit is non-refundable — it cannot exceed your tax liability.
See also: Child Tax Credit Calculator 2026, US Paycheck Calculator — Take-Home Pay 2026.
Assumptions
- Rate = 50% − 1 point per $2,000 of AGI over $15,000 (floor 35%) − 1 point per $2,000 ($4,000 joint) over $75,000 ($150,000 joint) (floor 20%), per IRC §21(a)(2).
- Expenses capped at $3,000 / $6,000, reduced by FSA contributions; FSA limit $7,500 ($3,750 separate).
- FSA saving = contribution × (marginal federal rate + 7.65% + state rate).
Worked example
At $120,000 AGI (under the $150,000 joint second step) the rate is 35%. Eligible expenses are capped at $6,000, so the credit alone is $2,100. Taxable income of $87,800 puts the couple in the 12% bracket, so the full $7,500 FSA would save only about $1,849 (12% + 7.65% + 5%) and, because it wipes out the $6,000 cap, leave no credit — the credit wins by about $250. At $180,000 AGI the same family would be in the 22% bracket with a 27% credit rate: credit $1,620 versus an FSA saving of $2,599, so the FSA would win by about $980.
Frequently asked questions
What is the child and dependent care credit rate for 2026?
50% of up to $3,000 / $6,000 of expenses at AGI of $15,000 or below, falling to 35% by about $45,000 and to 20% above about $105,000 (single) or $210,000 (joint).
Can I use both the FSA and the credit?
Yes, but FSA dollars reduce the $3,000 / $6,000 expense cap. With two children and a $7,500 FSA there is nothing left for the credit.
Does summer camp count?
Day camp does; overnight camp does not. Before- and after-school programmes count; private school tuition from kindergarten up does not.
Is the credit refundable?
No — it only reduces tax owed (the 2021 refundable version was temporary).
Can I claim the credit for a nanny?
Yes — household employee wages count, but you must pay nanny taxes and report the nanny's SSN on Form 2441.
Does the FSA have a use-it-or-lose-it rule?
Yes; unspent balances are forfeited, sometimes with a short grace period. Elect only what you are sure to spend.
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