Income & Tax Profile
2026 rules (OBBBA §129): DC-FSA max $7,500 (MFJ $7,500; single $7,500; MFS $3,750). CDCTC: 20–35% credit on up to $3,000 (1 child) / $6,000 (2+ children) after subtracting FSA. Credit rate phases out: 35% at AGI ≤$15K; 20% at AGI ≥$43K+. FICA = 7.65% saved on FSA contribution (employer's FICA match also saved but not counted here). Sources: IRC §129 (DC-FSA); IRC §21 (CDCTC); IRS Pub. 503.
Your federal marginal bracket (10–37%)
Affects CDCTC expense cap ($3K for 1, $6K for 2+)
FSA Availability
0 = automatically optimize to IRS max
FSA Only
Total annual tax savings
CDCTC Only
Total annual tax savings
Optimal Combo
Total annual tax savings
Optimal FSA Contribution
Pre-tax contribution recommended
FICA Savings on FSA
7.65% on FSA contribution
CDCTC Credit Amount
In optimal combo strategy
Effective Childcare Rate
After-tax cost / gross expense
Strategy Comparison
| Strategy | FSA Contribution | FSA Tax Savings | FICA Savings | CDCTC Credit | Total Savings | Net Childcare Cost |
|---|
CDCTC Rate Reference (IRC §21)
| AGI Range | Credit Rate | Max Credit (1 child) | Max Credit (2+ children) |
|---|---|---|---|
| ≤ $15,000 | 35% | $1,050 | $2,100 |
| $15,001 – $43,000 | 35% – 20% | $600–$1,050 | $1,200–$2,100 |
| $43,001+ | 20% | $600 | $1,200 |