How This Is Calculated
FSA tax savings = min(contribution, $7.500) × your marginal tax rate. Remaining eligible expenses beyond your FSA contribution may qualify for the Child and Dependent Care Credit at 35–50%, up to the expense cap.
Source: IRS 2026 inflation adjustments, as amended by the One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025 · Updated 2026-07-07 · Full methodology
What to Know
- The Dependent Care FSA limit nearly doubled to $7,500 in 2026 under OBBBA — households electing the maximum FSA contribution typically use up the Dependent Care Credit's expense cap and get little or no additional credit.
- The credit rate is highest (50%) at lower incomes and phases down to 35% — this calculator lets you enter your own rate to see which benefit is worth more for your household.
Frequently Asked Questions
$7,500 per household for 2026, following the One Big Beautiful Bill Act (OBBBA) — up from the long-standing $5,000 limit.
Yes, but they coordinate: any expenses reimbursed through your FSA cannot also be claimed for the credit. FSA contributions reduce your credit-eligible expenses dollar-for-dollar, up to the credit's expense cap ($3.000 for one child, $6.000 for two or more).
The 2026 credit rate ranges from 35% to 50% of eligible expenses, decreasing as income rises.
Generally yes, subject to your employer's plan rules (some allow a grace period or limited carryover). Check your specific plan documents — this calculator does not account for plan-specific rules.
No. This calculator produces an informational estimate only, based on published IRS figures. It is not tax advice — consult a qualified tax professional for guidance specific to your situation.