FSA Dependent care and Child tax care credit

[keelei24]

Hi,

My husband and I pay $17,000 yearly for child care for one child. My employer is offering the FSA depending care account of $5,000 yearly. We usually split our return 50/50 so I do not want to open this account if its going to lessen the refund amount. Will this lessen our tax refund if I were to open this account for myself? 

[Anonymous_]

@Critter-3 

[Critter-3 · Accepted solution]

It will reduce your refund however the FSA is a better option. Either you get a 20% credit on $3,000 with the child Care credit or you save approximately 30% on 5,000 through your payroll taxes.