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Choosing Between FSA Dependent Care Account or the Dependent
Care Tax Credit
When it comes to dependent care there are two ways to reduce
your tax burden:
- FSA dependent care account
- dependent care tax credit
Which method is most advantageous to you depends on your
tax bracket and how you file, the amount of your dependent
care expenses and the number of dependents.
You may be able to claim the credit if you pay someone to
care for your dependent who is under age 13 or for your spouse
or dependent who is not able to care for himself or herself.
The credit can be up to 35% of your expenses. To qualify,
you must pay these expenses so you can work or look for work.
The expenses are limited to $3,000 for one dependent and $6,000
for two or more dependents.
The following table assumes you have incurred the maximum
allowable dependent care expenses. You should review the Publication
503 from the IRS for more information and examples.
| Adjusted Gross Income
of Your (and Your Spouse) |
Credit Percentage |
Tax Credit for One
Dependent |
Tax Credit for Two
or More Dependents |
| $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 |
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