{
  "id": "dependent-care-credit",
  "version": "7e1d6288ed37",
  "status": "published",
  "name": "Child and Dependent Care Credit Calculator",
  "question": "My child and dependent care credit?",
  "summary": "Works out the 2026 child and dependent care credit on Form 2441: care expenses up to $3,000 or $6,000, limited by earned income and employer benefits, times the new 50% to 20% credit rate by AGI.",
  "category": "finance",
  "subcategory": "tax-and-pay",
  "url": "https://www.acalculator.org/finance/dependent-care-credit-calculator",
  "markdown": "https://www.acalculator.org/finance/dependent-care-credit-calculator.md",
  "kind": "function",
  "method": "Excluded benefits = the smallest of employer benefits, $7,500, expenses and each earned income. Expenses used = the smallest of ($3,000 or $6,000 − excluded benefits), (expenses − excluded benefits), your earned income and your spouse’s. Rate = 50% − 1 point per $2,000 or part of AGI over $15,000 (not below 35%), then − 1 point per $2,000 ($4,000 joint) or part of AGI over $75,000 ($150,000 joint), not below 20%. Credit = expenses used × rate, no more than your tax.",
  "assumptions": [
    "Tax year 2026 (IRC 21 and 129 as amended by P.L. 119-21). Every amount is between −$1 trillion and $1 trillion; AGI may be negative.",
    "Expenses are work-related and paid in 2026 for qualifying persons, to a care provider who is not your spouse, your dependent or your child under 19. Expenses prepaid or paid late for another year are not included.",
    "Employer benefits are all for 2026 care with nothing forfeited or carried over, and none are deducted on Schedule C, E or F. A spouse who was a full-time student or unable to care for themselves is entered as $250 a month ($500 with two or more persons).",
    "With the tax box empty the credit is not limited by your tax; it is not refundable. An estimate, not tax advice."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "status": {
        "title": "Filing status",
        "description": "Married couples must file jointly to claim the credit, unless they lived apart for the last 6 months of the year.",
        "type": "string",
        "enum": [
          "single",
          "mfj",
          "mfs"
        ]
      },
      "persons": {
        "title": "Qualifying persons",
        "description": "Children under 13, or a spouse or dependent unable to care for themselves, whose care you paid for.",
        "type": "string",
        "enum": [
          "1",
          "2"
        ]
      },
      "expenses": {
        "title": "Care expenses paid",
        "description": "Work-related care expenses you paid in 2026: daycare, preschool, before and after school care, day camp.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "agi": {
        "title": "Adjusted gross income (AGI)",
        "description": "Your 2026 adjusted gross income (Form 1040 line 11); it sets the credit rate.",
        "type": "number",
        "x-unit": "USD",
        "minimum": -1000000000000,
        "maximum": 1000000000000
      },
      "earned": {
        "title": "Your earned income",
        "description": "Your wages and net self-employment earnings for 2026.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "spouse": {
        "title": "Spouse’s earned income",
        "description": "Your spouse’s earned income; a full-time student or disabled spouse counts $250 a month ($500 with two or more persons).",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "benefits": {
        "title": "Employer dependent care benefits (optional)",
        "description": "Dependent care benefits your employer paid or put in a dependent care FSA (W-2 box 10).",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "tax": {
        "title": "Tax before credits (optional)",
        "description": "Your income tax before credits (Form 1040 line 18) minus any foreign tax credit; the credit cannot be more.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      }
    }
  },
  "outputs": {
    "credit": {
      "label": "Child and dependent care credit",
      "description": "Expenses used × the credit rate, but no more than your tax when you type it (Form 2441 line 11).",
      "format": "money"
    },
    "used": {
      "label": "Expenses used",
      "description": "The smallest of your expenses (less excluded benefits), the dollar limit (less excluded benefits) and each earned income (line 6).",
      "format": "money"
    },
    "rate": {
      "label": "Credit rate",
      "description": "50% at AGI up to $15,000, down to 35%, then down to 20% at higher AGI (line 8).",
      "format": "percent"
    },
    "beforeLimit": {
      "label": "Credit before the tax limit",
      "description": "Expenses used × the credit rate (line 9a).",
      "format": "money"
    },
    "excluded": {
      "label": "Benefits excluded from income",
      "description": "The smallest of your employer benefits, $7,500, your expenses and each earned income.",
      "format": "money"
    },
    "taxable": {
      "label": "Taxable benefits",
      "description": "Employer benefits − the excluded part; they go on your W-2 wages line.",
      "format": "money"
    },
    "dollarLimit": {
      "label": "Dollar limit left",
      "description": "$3,000 or $6,000 − excluded benefits, not below $0 (line 29).",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "status": "mfj",
      "persons": "2",
      "expenses": 8000,
      "agi": 95000,
      "earned": 55000,
      "spouse": 40000
    },
    "outputs": {
      "credit": 2100,
      "used": 6000,
      "rate": 35,
      "beforeLimit": 2100,
      "excluded": 0,
      "taxable": 0,
      "dollarLimit": 6000
    },
    "text": "With $8,000.00 of care expenses and $95,000.00 of AGI, your 2026 child and dependent care credit is $2,100.00."
  },
  "examples": [
    {
      "given": {
        "status": "mfj",
        "persons": "2",
        "expenses": 8000,
        "agi": 95000,
        "earned": 55000,
        "spouse": 40000
      },
      "expect": {
        "used": 6000,
        "rate": 35,
        "credit": 2100,
        "beforeLimit": 2100
      },
      "source": "26 U.S.C. 21(a)(2) as amended by P.L. 119-21 section 70405 (50%, less 1 point per $2,000 or part of AGI over $15,000, not below 35%; less 1 point per $2,000, $4,000 joint, or part of AGI over $75,000, $150,000 joint, not below 20%), (c) and (d), https://www.law.cornell.edu/uscode/text/26/21 (AGI $95,000 is over $43,000, so 35%; not over $150,000 joint); IRS Instructions for Form 2441 (2025): Part II lines 3 to 11, the Credit Limit Worksheet, Part III dependent care benefits, https://www.irs.gov/instructions/i2441; Publication 503 (2025), https://www.irs.gov/publications/p503; hand calculation in content.mdx; Python 3 check in docs/progress/WP-142/xcheck.py"
    },
    {
      "given": {
        "status": "single",
        "persons": "1",
        "expenses": 4000,
        "agi": 14000,
        "earned": 14000,
        "tax": 0
      },
      "expect": {
        "used": 3000,
        "rate": 50,
        "beforeLimit": 1500,
        "credit": 0
      },
      "source": "26 U.S.C. 21(a)(2) as amended by P.L. 119-21 section 70405 (50%, less 1 point per $2,000 or part of AGI over $15,000, not below 35%; less 1 point per $2,000, $4,000 joint, or part of AGI over $75,000, $150,000 joint, not below 20%), (c) and (d), https://www.law.cornell.edu/uscode/text/26/21 (50% at AGI up to $15,000); IRS Instructions for Form 2441 (2025): Part II lines 3 to 11, the Credit Limit Worksheet, Part III dependent care benefits, https://www.irs.gov/instructions/i2441; Publication 503 (2025), https://www.irs.gov/publications/p503 (the credit is not refundable: Credit Limit Worksheet); Python 3 check in docs/progress/WP-142/xcheck.py"
    },
    {
      "given": {
        "status": "single",
        "persons": "1",
        "expenses": 5000,
        "agi": 30500,
        "earned": 30500,
        "tax": 1200
      },
      "expect": {
        "used": 3000,
        "rate": 42,
        "beforeLimit": 1260,
        "credit": 1200
      },
      "source": "26 U.S.C. 21(a)(2) as amended by P.L. 119-21 section 70405 (50%, less 1 point per $2,000 or part of AGI over $15,000, not below 35%; less 1 point per $2,000, $4,000 joint, or part of AGI over $75,000, $150,000 joint, not below 20%), (c) and (d), https://www.law.cornell.edu/uscode/text/26/21 (⌈15,500 ÷ 2,000⌉ = 8 points); hand calculation in content.mdx; Python 3 check in docs/progress/WP-142/xcheck.py"
    },
    {
      "given": {
        "status": "mfj",
        "persons": "2",
        "expenses": 9000,
        "agi": 180000,
        "earned": 100000,
        "spouse": 80000,
        "benefits": 5000
      },
      "expect": {
        "excluded": 5000,
        "dollarLimit": 1000,
        "used": 1000,
        "rate": 27,
        "credit": 270,
        "taxable": 0
      },
      "source": "26 U.S.C. 21(a)(2) as amended by P.L. 119-21 section 70405 (50%, less 1 point per $2,000 or part of AGI over $15,000, not below 35%; less 1 point per $2,000, $4,000 joint, or part of AGI over $75,000, $150,000 joint, not below 20%), (c) and (d), https://www.law.cornell.edu/uscode/text/26/21 (⌈30,000 ÷ 4,000⌉ = 8 points off 35%); IRS Instructions for Form 2441 (2025): Part II lines 3 to 11, the Credit Limit Worksheet, Part III dependent care benefits, https://www.irs.gov/instructions/i2441; Publication 503 (2025), https://www.irs.gov/publications/p503 (Part III lines 25 to 31); hand calculation in content.mdx; Python 3 check in docs/progress/WP-142/xcheck.py"
    },
    {
      "given": {
        "status": "mfs",
        "persons": "2",
        "expenses": 20000,
        "agi": 95000,
        "earned": 55000,
        "benefits": 5000
      },
      "expect": {
        "excluded": 5000,
        "taxable": 0,
        "dollarLimit": 1000,
        "used": 1000,
        "rate": 25,
        "credit": 250
      },
      "source": "26 U.S.C. 129(a)(2)(A) and (C) and 21(e)(4), https://www.law.cornell.edu/uscode/text/26/129; 26 U.S.C. 21(a)(2) as amended by P.L. 119-21 section 70405 (50%, less 1 point per $2,000 or part of AGI over $15,000, not below 35%; less 1 point per $2,000, $4,000 joint, or part of AGI over $75,000, $150,000 joint, not below 20%), (c) and (d), https://www.law.cornell.edu/uscode/text/26/21 (⌈20,000 ÷ 2,000⌉ = 10 points off 35%); hand calculation in content.mdx; Python 3 check in docs/progress/WP-142/xcheck.py"
    },
    {
      "given": {
        "status": "single",
        "persons": "1",
        "expenses": 3000,
        "agi": 250000,
        "earned": 250000
      },
      "expect": {
        "used": 3000,
        "rate": 20,
        "credit": 600
      },
      "source": "26 U.S.C. 21(a)(2) as amended by P.L. 119-21 section 70405 (50%, less 1 point per $2,000 or part of AGI over $15,000, not below 35%; less 1 point per $2,000, $4,000 joint, or part of AGI over $75,000, $150,000 joint, not below 20%), (c) and (d), https://www.law.cornell.edu/uscode/text/26/21 (not below 20%); Python 3 check in docs/progress/WP-142/xcheck.py"
    }
  ],
  "sources": [
    "26 U.S.C. § 21, Legal Information Institute, as amended by P.L. 119-21 section 70405 for tax years beginning after December 31, 2025: (a)(2) the applicable percentage (50%, reduced by 1 point for each $2,000 or fraction of AGI over $15,000, not below 35%; further reduced by 1 point for each $2,000, $4,000 joint, or fraction over $75,000, $150,000 joint, not below 20%); (c) $3,000 and $6,000, less amounts excluded under section 129; (d) the earned income limit and the $250 or $500 a month for a student or disabled spouse; (e)(4) a married person filing separately who kept up the home of a qualifying person, with the spouse not a member of the household for the last 6 months, is not considered married. https://www.law.cornell.edu/uscode/text/26/21 (retrieved 2026-10-19)",
    "26 U.S.C. § 129(a)(2), Legal Information Institute: (A) $7,500 ($3,750 for a separate return by a married individual) of dependent care assistance excluded, for tax years beginning after December 31, 2025 (P.L. 119-21 section 70404); (C) marital status follows section 21(e)(3) and (4), so the married person who lived apart is not married for this limit. https://www.law.cornell.edu/uscode/text/26/129 (retrieved 2026-10-19)",
    "IRS, One, Big, Beautiful Bill provisions: the child and dependent care credit enhancement (section 70405) raises the maximum credit rate from 35% to 50% from tax year 2026; the $3,000 and $6,000 limits stay. https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions (retrieved 2026-10-19)",
    "IRS, Instructions for Form 2441 (2025): Part II, the Credit Limit Worksheet (Form 1040 line 18 less the foreign tax credit), Part III dependent care benefits (its $2,500 separate-filer amount does not address a filer treated as unmarried; 26 U.S.C. 129(a)(2)(C) does). https://www.irs.gov/instructions/i2441 (retrieved 2026-10-19)",
    "IRS, Publication 503 (2025), Child and Dependent Care Expenses: qualifying persons, the earned income limit, married filing separately and living apart, the dollar limit less excluded benefits. https://www.irs.gov/publications/p503 (retrieved 2026-10-19)"
  ],
  "related": [
    "child-tax-credit",
    "earned-income-credit",
    "fsa",
    "income-tax"
  ],
  "changelog": []
}