The FSA can be used on a max of $5,000 of expenses regardless of number of children unless the law changes for 2022. This lowers your income by $5,000 since it is a pre-tax deduction. The FSA would save you your tax rate multiplied by the $5,000.
For 2021, the dependent care credit covers a maximum of $4,000 expenses for one child or $8,000 for two or more. The credit is subject to a percentage based on your income level. The maximum percentage is 50% of the dependent care expenses paid (maximum savings of $4,000). These amounts are subject to change for 2022.
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