I have a 2018 Tax question. Dependent Care FSA vs Child Tax Credit in 2018

[desitapori]

I am putting $2500 in my dependent care FSA. This was set up during my 2018 Open Enrollment before the new tax law. I am now eligible for $2000 child tax credit. Am I eligible for both benefits. Considering I will spend $2500 on my kid during 2018 would it make sense to cancel my dependent care FSA if I am qualify for only one benefit.

[Lisa995 · Accepted solution]

Child Tax Credit is a totally different credit than the Dependent Care Credit.  Its not uncommon to qualify for both.

[TaxGuyBill]

As Lisa pointed out, having a FSA will NOT disqualify the Child Tax Credit.  You can potentially qualify for both of them.

[wdonehow]

How does the FSA interact with the DCC?  If dependent costs are large, eg, $30,000 per year, can a taxpayer make use of both the FSA and the DCC?  

[SweetieJean]

$30,000 for child care just while you work? Or is that school tuition?

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://www.fool.com/taxes/2017/11/05/2018-fsa-changes-use-a-flexible-spending-account-t.aspx">https...>

[SweetieJean]

The credit is worth between 20 and 35 percent of allowable expenses. The percentage depends on the income amount. Allowable expenses are limited to $3,000 for paid care of one qualifying person. The limit is $6,000 if the taxpayer paid for the care of two or more.

[Lisa995]

multiple kids all in daycare/preschool fulltime, could very well add up to 30K a year...at least here in CA it could.

[SweetieJean]

Yikes!  Just wanted to make sure that OP didn't think they could deduct the cost of, say, a full time live in Nanny; or a boarding school.

[Lisa995]

My daughter has a 2 year old and a 4 year old, 3 days a week in preschool $400 a week.   Insanity!