How this calculator works
Tax year: 2026, United States. Up to $3,000 of work-related care expenses count for one qualifying person, or $6,000 in total for two or more. The credit is a percentage of the smaller of those expenses, your earned income and, for a married couple, the lower earner income. The percentage is 35% when adjusted gross income is $15,000 or less and falls by one percentage point for each $2,000 above that, with a floor of 20% above $43,000. This is different from the Child Tax Credit, which is claimed per qualifying child and does not depend on care expenses, and from Canada, which uses a deduction for child care expenses rather than a federal credit. The model leaves out the qualifying person tests, the deemed earned income of $250 or $500 a month for a student or disabled spouse, the coordination with dependent care flexible spending account benefits, the refundability rules for certain employer benefits, and state credits.
Formula
Care expense limit = $3,000 for one qualifying person or $6,000 for two or more. Expenses counted = min(care expenses, limit, your earned income, spouse earned income if married). Credit percentage = max(20%, 35% - 1% x ceil(max(0, adjusted gross income - $15,000) / $2,000)). Credit = expenses counted x credit percentage.
Worked example
A married couple with two qualifying children pays $8,000 for care, has $40,000 of adjusted gross income and earns $45,000 and $35,000. The $6,000 limit applies and the lower earner income does not bind. Adjusted gross income is $25,000 above $15,000, so the rate falls 13 points to 22%. The credit is 22% of $6,000, which is $1,320.
Frequently asked questions
How much of my child care cost can I claim?
Up to $3,000 for one qualifying person and $6,000 in total for two or more, whichever is lower than the care you paid and the earned income limit.
What income is the credit percentage based on?
Adjusted gross income. The rate starts at 35% and falls one point for every $2,000 above $15,000 until it reaches 20% at $43,000.
Can both spouses work and still claim the credit?
Yes, but the expenses counted cannot exceed the lower of the two earned incomes. If one spouse has no earned income and is not a student, the credit is usually zero.
Does a dependent care FSA reduce the credit?
Yes. Expenses paid through a dependent care flexible spending account cannot also be used for the credit, and the $5,000 exclusion reduces the dollar limit. That coordination is not modelled here.