Dependent Care FSA Calculator

A Dependent Care FSA (DCFSA) is an employer-sponsored benefit that lets you set aside pre-tax dollars through payroll deductions to pay for childcare or elder care expenses. Contributions reduce your taxable income and also avoid Social Security and Medicare (FICA) taxes, saving you money on every dollar you contribute. The annual contribution limit for 2025 is $5,000 per household (or $2,500 if married filing separately).

For 2025, the Dependent Care FSA contribution limit is $5,000 per household for single filers and married couples filing jointly, or $2,500 for married individuals filing separately. This limit has been unchanged for many years, but legislation has proposed increasing it to $7,500 starting in 2026. Unlike HSAs, DCFSA limits are not indexed to inflation annually.

The better option depends on your income. A DCFSA is generally more valuable at higher incomes because it saves both income tax and FICA taxes (7.65%) on contributed dollars. The Child and Dependent Care Tax Credit may be more valuable at lower incomes, where the credit rate reaches 35% of up to $3,000 (one dependent) or $6,000 (two or more dependents) in expenses. Note that expenses used for the DCFSA reduce the expenses eligible for the credit, so you typically cannot double-count the same dollars. Our calculator compares both options side-by-side for your situation.

Qualifying expenses include daycare and childcare centers, preschool (but not kindergarten or above), before- and after-school care programs, summer day camps (not overnight camps), babysitters and nannies, au pairs, and elder care or adult day care for a qualifying dependent who is physically or mentally incapable of self-care. Expenses must be for a dependent under age 13 (or any age if the dependent cannot care for themselves) so that you and your spouse can work or look for work.