Should I use the Dependent Day Care Flexible Spending Account or the IRS tax credit?
The Dependent Day Care Flexible Spending Account allows up to $5,000.00 to be exempted from federal, state and FICA taxes. The average tax savings is 40% or $2,000.00 per year if you elect the maximum $5,000.00. The tax credit has a sliding scale for the percentage and has a limit of a percentage of $3,000.00 for a single child and of $6,000.00 for two or more children. Please see the Dependent Day Care Reimbursement Account form in the forms section of the website for a comparison of the two programs and a work sheet.
Related Questions
- If my employer did not put the amount I paid into a flexible spending account for dependent care in box 10 on my Form W-2, can I claim the Child and Dependent Care Tax Credit?
- Can I use both the Dependent Care Flexible Spending Account and the Federal Dependent Care Tax Credit?
- Should I use the Dependent Day Care Flexible Spending Account or the IRS tax credit?
