Dependent Care FSA Tax Savings Calculator
Calculate federal, state, and FICA tax savings from maxing out your Dependent Care FSA.
Dependent Care FSA Basics
A Dependent Care FSA (DCFSA) is an employer-sponsored, pre-tax account for childcare expenses. You contribute up to $5,000/year ($2,500 if MFS) through payroll deduction. Funds avoid federal income tax, state income tax, AND FICA — making it the most tax-efficient way to pay for childcare for most families. Source: IRS Section 129, Publication 503. Last updated: May 2026.
What Qualifies as Dependent Care Expense
(1) Daycare for children under 13. (2) Preschool. (3) Summer day camp (not overnight). (4) Before/after-school programs. (5) In-home nanny or au pair (with tax compliance). (6) Adult dependent care for incapacitated spouse or parent who lives with you. NOT covered: overnight camp, kindergarten and above grade-level tuition, transportation, food.
DCFSA vs Child & Dependent Care Tax Credit
You can't use both on the same expenses. The FSA usually wins for AGI above $43,000 (where the credit rate drops to 20%). The credit may win for lower-income families because it's partially refundable (you get cash even with no tax liability). Run both calculators.
Use-It-Or-Lose-It Risk
Unspent DCFSA dollars at year-end (or grace period if employer offers one) are forfeited. Conservative approach: contribute slightly less than expected expenses ($4,500 if you expect $5,200 in childcare). The savings on $4,500 ($1,300+) still exceeds forfeiture risk.