Dependent Care Tax Credit Chart
Choosing Between a Dependent Care FSA and the Dependent Care Tax Credit
In addition to the Dependent Care FSA, there is a second way to reduce your taxes - the dependent care tax credit. Which is better will depend on your tax bracket, the type of income tax return you file, amount of your dependent care expenses and the number of dependents you have.
In addition to the Dependent Care FSA, there is a second way to reduce your taxes - the dependent care tax credit. Which is better will depend on your tax bracket, the type of income tax return you file, amount of your dependent care expenses and the number of dependents you have.
When calculating the dependent care tax credit you may use up to $3,000 of dependent care expenses if you have one dependent and up to $6,000 of expenses if you have two or more dependents. The chart below illustrates the maximum amount of tax credit you will be eligible for based on your adjusted gross income. You need to determine which is better, the Dependent Care Tax Credit or the Dependent Care FSA or a combination of both.
| You (& your spouse) Adjusted Gross Income | Credit Percentage | $3,000 Maximum Expenses One Dependent Tax Credit | $6,000 Maximum Expenses Two or More Dependents Tax Credit |
| $15,000 or less | 35% | $ 1,050 | $ 2,100 |
| $15,001 - $17,000 | 34% | $ 1,020 | $ 2,040 |
| $17,001 - $19,000 | 33% | $ 990 | $ 1,980 |
| $19,001 - $21,000 | 32% | $ 960 | $ 1,920 |
| $21,001- $23.000 | 31% | $ 930 | $ 1,860 |
| $23,001 - $25,000 | 30% | $ 900 | $ 1,800 |
| $25,001 - $27,000 | 29% | $ 870 | $ 1,740 |
| $27,001 - $29,000 | 28% | $ 840 | $ 1,680 |
| $29,001 - $31,000 | 27% | $ 810 | $ 1,620 |
| $31,001 - $33,000 | 26% | $ 780 | $ 1,560 |
| $33,001 - $35,000 | 25% | $ 750 | $ 1,500 |
| $35,001 - $37,000 | 24% | $ 720 | $ 1,440 |
| $37,001 - $39,000 | 23% | $ 690 | $ 1,380 |
| $39,001 - $41,000 | 22% | $ 660 | $ 1,320 |
| $41,001 - $43,000 | 21% | $ 630 | $ 1,260 |
| $43,001 or more | 20% | $ 600 | $ 1,200 |
