A separate tax credit from the Dependent Care FSA — available whether or not an employer offers that pre-tax benefit, with its own income-based credit rate.
How it works
Qualifying care expenses, capped at $3,000 for one dependent or $6,000 for two or more, are multiplied by a credit rate that ranges from 50% at low income down to a 20% floor at higher income levels.
What this does not include
This approximates the phase-down between the 35% plateau and 20% floor as a smooth linear reduction rather than the IRS’s exact stepped dollar increments — accurate to within roughly a percentage point of the precise table.
How to use this calculator
- Enter filing status, care expenses, number of dependents, and AGI.
Frequently asked questions
Can I use both a Dependent Care FSA and this credit?
Not for the same expenses — expenses paid through a Dependent Care FSA reduce the expense amount eligible for this credit, since both can’t apply to the identical dollar of spending.
What changed with the 2026 rate increase?
The One Big Beautiful Bill Act permanently raised the maximum credit rate from 35% to 50%, benefiting lower-income families the most since they qualify for the highest rate.
Do both spouses need earned income to claim this credit?
Generally yes for a married couple filing jointly — both spouses must have earned income (or one must be a full-time student or disabled) for the care expenses to qualify.
