Can you have dependent care FSA and still get dependent care credit or child tax credit?

[gabnjr]

I'm not too sure which one the FSA for dependent care would cancel out or if the FSA cancels out both credits.. My husband and I both have open enrollment for FSAs right now, (we understand only one of us can enroll but we'll see whos plan works out best if we go this route.) but Im wondering if its worth doing FSA for dependent care and we save more paying with pre tax dollars, or the usual dependent care and child tax credits we usually file for, or if we can do an FSA and still qualify for an additional credit? Any insight would be great since we've never enrolled in FSA before.

We file married jointly, 25% earning bracket, 3 dependents, and expenses come out to about 10k for childcare only. 

[Opus 17 · Accepted solution]

The FSA is better for anyone whose income is more than about $18,000 (last time I did the math.)

The FSA can be used on a max of $5000 of expenses regardless of number of children.  The dependent care credit covers a maximum of $3000 expenses for one child or $6000 for two or more.  If you do provide care for 2 or more children, you can max out the FSA and then use the next $1000 of additional expenses to get the dependent care credit (so you leverage a total of $6000 of expenses.)

In your case, the FSA saves you 25% federal tax plus 3-10% state tax depending on the state on the first $5000 of expenses, and the dependent care credit will pay 20% of $1000 more; while using the dependent care credit only without the FSA would save you 20% up to the first $6000.

[SweetieJean]

The Child Tax Credit is a separate credit, not related to the Child Care Credit and FSA.

[Critter]

Don't forget you also save on FICA taxes so add another 7.65% to the 25% + state taxes and your decision is a no brainer .... give up 20% to get 32.65 %  to 40% instead .... just be careful about the use it or lose it clause and don't over fund it.

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://www.irs.gov/individuals/child-tax-credit">https://www.irs.gov/individuals/child-tax-credit</...>