Dependent Care Credit Calculator

The Child and Dependent Care Credit (Form 2441) is a non-refundable federal tax credit for working parents who pay for the care of children under 13 or disabled dependents in order to work or look for work. The credit is a percentage of up to $3,000 in expenses for one qualifying person or $6,000 for two or more qualifying persons, and the percentage depends on your adjusted gross income: 20%-35% for 2025, rising to 20%-50% for 2026 after OBBBA §70405 raised the top rate.

For 2025 (pre-OBBBA rates), the maximum credit is $1,050 for one qualifying person (35% of $3,000) or $2,100 for two or more qualifying persons (35% of $6,000). These maximum amounts apply only if your AGI is $15,000 or less. At higher incomes, the credit percentage decreases: it drops to 20% once AGI exceeds $43,000, giving a maximum credit of $600 (one person) or $1,200 (two or more).

The One Big Beautiful Bill Act (OBBBA, P.L. 119-21 §70405) raises the top Child and Dependent Care Credit rate from 35% to 50%, effective for tax years beginning after December 31, 2025 — so 2026 is the first year it applies. The $3,000/$6,000 expense limits are unchanged. The 50% rate applies at AGI $15,000 or less, steps down to a 35% plateau by AGI $43,001, holds at 35% through $75,000 ($150,000 MFJ), then steps down again to the unchanged 20% floor once AGI exceeds about $103,000 ($206,000 MFJ). At the lowest incomes, the maximum credit rises from $1,050 to $1,500 (one person) or $2,100 to $3,000 (two or more).

Yes, but DCFSA contributions reduce your eligible expenses for the credit dollar-for-dollar. If you contribute the $7,500 2026 DCFSA household limit with one qualifying child, you have no remaining eligible expenses for the credit ($3,000 limit minus $7,500 = $0). With two or more children, the $7,500 DCFSA contribution also exceeds the $6,000 limit, leaving $0 remaining for the credit. The optimal strategy depends on your income and tax rates.

Qualifying expenses include daycare, preschool (not kindergarten or above), before- and after-school care, summer day camps (not overnight camps), babysitters, nannies, and au pairs for children under 13. Care for a disabled spouse or dependent of any age also qualifies. The expenses must be work-related — they must enable you (and your spouse, if married) to work or look for work.