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Returning Member
posted Oct 27, 2022 2:23:35 PM

FSA Dependent care and Child tax care credit

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? 

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1 Best answer
Level 15
Nov 1, 2022 11:22:21 AM

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.

2 Replies
Level 15
Nov 1, 2022 10:01:58 AM

@Critter-3 

Level 15
Nov 1, 2022 11:22:21 AM

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.