Dependent Care FSA Savings Calculator
Your numbers
Three fields, sixty seconds. New for 2026: the contribution limit doubled to $7,500.
Combined pre-tax income. We use this as your AGI — pretax 401(k)/HSA contributions lower AGI and can shift the FSA-vs-credit winner near thresholds
Married filing separately caps the FSA at $3,750
Daycare, preschool, summer day camp, after-school care. National infant average: $17,264/yr
How we calculate this
A dependent care FSA lets you pay for childcare with money that never gets taxed. Every dollar you contribute skips federal income tax and the 7.65% payroll tax — that second part is what most people miss, and it's why the FSA usually beats waiting for a tax credit at filing time.
The income tax piece is computed exactly, not with a flat marginal rate. We apply the 2026 standard deduction, then measure your federal tax with and without the contribution across the actual bracket tables. If your contribution straddles a bracket line, a flat-rate estimate overstates your savings — in our single-filer example below, the honest answer is $400 lower than the naive one. The payroll tax piece is 7.65% of the contribution (1.45% if you earn above the $184,500 Social Security wage base).
The limit doubled for 2026: $7,500 per household ($3,750 married filing separately), up from the $5,000 cap that had been frozen since 1986. If you looked at this benefit years ago and shrugged, look again.
The dependent care credit — computed, not guessed: the IRS lets you use the FSA or the dependent care tax credit, and every FSA dollar reduces your credit-eligible expenses dollar-for-dollar — a full $7,500 FSA wipes out the $6,000 two-child credit cap entirely (IRC §21(c)). So the calculator runs both corners with your numbers: maximum FSA with no credit, versus zero FSA with the full credit. For 2026 the credit starts at 50% of eligible expenses ($3,000 cap for one child, $6,000 for two or more) and phases down twice: one point per $2,000 of AGI above $15,000 until it hits 35%, then — past $75,000 AGI single or $150,000 joint — one point per $2,000 (single) or $4,000 (joint) until it floors at 20%. The credit is also nonrefundable, so we cap it at your federal tax bill; the FSA's payroll-tax savings have no such ceiling, which is why the FSA can win even when your income tax is near zero. There's no clever middle ground, either — the math (and our test suite) confirms the best answer is always one corner or the other, never a partial split.
Also not modeled: state income tax (most states follow the federal exclusion, adding savings) and the earned-income test (your contribution can't exceed the lower-earning spouse's income — relevant if one spouse is in school or working part-time).
Real scenarios
Two incomes, one daycare bill: $1,474 back
A married couple earning $120,000 with $15,000 in daycare costs maxes the $7,500 FSA. They save $900 in federal income tax (12% bracket) plus $574 in payroll tax — $1,474 total, a 9.8% discount on their childcare bill for filling out one enrollment form.
The bracket line makes flat estimates wrong
A single parent earning $70,000 contributes $7,500. A naive “22% marginal rate” estimate promises $1,650 of income tax savings — but only part of the contribution sits in the 22% bracket. The exact answer is $1,250, plus $574 of payroll tax: $1,824 total. Still excellent; just $400 less than the flat-rate math implies.
Married filing separately: half the room
A parent filing separately (say, chasing a lower student-loan IDR payment) is capped at $3,750. At $90,000 of income that still saves about $1,112 a year — but the halved limit is a real cost of the MFS strategy that belongs in the loan-vs-taxes math.