Childcare Cost Calculator
The children, the bill, and the two tax breaks
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Planning estimate only. Enter complete, current figures and keep an appropriate buffer for irregular or unexpected expenses.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter how many children are in infant care and what you pay a month for each, then the same for toddler or preschool care. The national averages are $1,311 a month for center-based infant care and $1,046 for a four-year-old, but the state spread runs from under $7,000 a year to over $28,000.
- 02
Enter any sibling discount your provider gives on children after the first. It applies to every child but the most expensive one, which is where a discount actually lands.
- 03
Enter your adjusted gross income. The credit percentage is a two-stage phase-down measured against it, and nothing about the credit can be priced until the page knows where you sit.
- 04
Enter what you plan to put in a dependent-care FSA. In 2026 the limit is $7,500 — raised from $5,000 — and this is the field that moves the answer most, because an FSA election escapes income tax and payroll tax together.
- 05
Enter your marginal tax rate, then read the two results side by side: what the FSA saves, and what is left creditable after the FSA has reduced it. The schedule below prints the credit rate at a range of incomes for both filing statuses, so you never have to guess which column is yours.
Formula
Gross bill = (infants × infant monthly + older children × their monthly) × 12, less the sibling discount applied to every child but the most expensive. FSA excluded = the smallest of your election, the $7,500 limit and the bill. FSA saving = that amount × (marginal rate + 7.65% payroll). Expense cap = $6,000 if two or more children, $3,000 if one. Creditable expense = max(0, min(bill, cap) − FSA excluded) — the section 21(c) offset. Credit rate = 50%, less one point per $2,000 (rounded up) of AGI over $15,000 down to a 35% floor, less one more point per $2,000 ($4,000 joint) over $75,000 ($150,000 joint) down to a 20% floor. Credit = creditable expense × that rate. Net cost = bill − FSA saving − credit.
Example
One infant at $1,400 a month and one preschooler at $1,050, a 10% sibling discount, $135,000 of AGI, a full $7,500 FSA election, a 24% marginal rate. The gross bill is $29,400; the discount applies to the cheaper child's $12,600 and takes $1,260 off, so the bill is $28,140. The FSA excludes $7,500, saving $2,374 at 31.65% — income tax and payroll tax together. Now the offset: two children cap creditable expense at $6,000, and $6,000 minus $7,500 of FSA is zero, so the credit is $0 filing single and $0 filing jointly alike. Net cost is $25,766 a year, or $2,147 a month, and the tax breaks covered 8% of the bill. Had the FSA been left at zero, the same household would have had $6,000 creditable at 35% jointly — a $2,100 credit — which is $274 less than the FSA is worth. That is the whole trade, and it is invisible on any calculator that shows both benefits without applying section 21(c).
Definitions
- Dependent-care FSA
- An employer benefit that lets you pay childcare from pre-tax salary, up to $7,500 in 2026. It escapes income tax and payroll tax, and it is use-it-or-lose-it.
- Section 21(c) offset
- The rule that reduces creditable expense dollar for dollar by whatever the FSA excluded. It is why the two benefits do not stack, and why maxing the FSA extinguishes the credit in 2026.
- Applicable percentage
- The share of creditable expense the credit pays — 50% at the bottom of the income scale, falling in two stages to a 20% floor.
- Non-refundable credit
- A credit that reduces tax owed and stops at zero. It cannot generate a refund and unused amounts are not carried forward.
- Qualifying individual
- A child under 13 in your care, or a spouse or dependent unable to care for themselves. The count decides whether the $3,000 or the $6,000 cap applies.
Good to know
What the bill actually is, and how stale the average is
The national average for center-based infant care is about $1,311 a month, and about $1,046 for a four-year-old. Those figures come from Child Care Aware of America's Child Care in America: 2025 Price & Supply, and three things about their provenance matter more than the numbers. First, the dates: the report was published in May 2026, but the prices were collected between December 2024 and March 2025 and the report calls them 2025 prices. So a figure sitting next to a 2026 page date is describing roughly December 2024, and prices rose about 23% between 2021 and 2025 — the label overstates its freshness by a year. Second, the source: Child Care Aware is a national nonprofit surveying state resource and referral agencies, not a federal statistical agency. It is the standard citation precisely because no federal agency publishes a current national childcare price at all, but it is not primary, and this page names it rather than implying a government source. Third, the spread: state averages run from under $7,000 a year in the cheapest states to over $28,000 in the District of Columbia, which is a factor of four on the same service. Any national average for childcare is a benchmark to correct with a local quote, not an answer, which is exactly why every one of these figures ships here as an editable field rather than as a constant in the code.
The dependent-care FSA, and why it beats the credit
There are two federal breaks on childcare and they are not equally useful. The dependent-care FSA is an employer benefit that lets you pay childcare from pre-tax salary, and in 2026 the limit is $7,500 — raised from $5,000 by P.L. 119-21, enacted 4 July 2025 and effective for tax years beginning after 31 December 2025. Note that this is a statutory amount rather than an inflation adjustment; it is not in the annual revenue procedure that indexes most figures, because section 129 is not among the code sections that procedure adjusts. What makes the FSA the stronger lever is not the limit but the payroll tax. Because the election comes out of gross pay, it escapes income tax AND the 6.2% of Social Security and 1.45% of Medicare together — worth about 32 cents on the dollar at a 24% marginal rate, and worth it in the paycheck rather than at filing. The Child and Dependent Care Credit, by contrast, is worth between 20% and 50% of a capped expense and is non-refundable, so it can only wipe out tax you already owe and produces nothing for a household whose liability is already zero. The exception, and it is a narrow one, is a household with very low AGI where the credit rate is near 50% and the income tax rate is near nothing. For everyone else the FSA wins, and the only real question is whether to elect the full $7,500 — which brings us to the rule that makes 2026 different from every year before it.
Section 21(c): the offset that extinguishes the credit
The two breaks do not stack the way people assume, and in 2026 they barely coexist. IRC section 21(c) reduces your creditable expense — the $3,000 for one qualifying child, $6,000 for two or more — dollar for dollar by whatever was excluded from income under section 129, which is the FSA. Do the subtraction at the 2026 numbers: $6,000 of cap minus $7,500 of FSA is less than nothing, so a household that maxes the dependent-care FSA has ZERO creditable expense left. Not reduced — extinguished, for one child and for four alike. This is genuinely new. Under the old $5,000 limit a two-child family that maxed its FSA still kept $1,000 of creditable expense and could claim a small credit alongside it, which is why so much existing guidance describes the two as complementary. Tax year 2026 is the first year in which they are not. The practical consequence is that any calculator showing the FSA saving and the credit side by side without applying this offset overstates the total benefit by the entire credit — up to $3,000 — and the error is invisible because both halves look right. It also changes the elective decision in a way worth thinking through: at a low AGI, where the credit rate is near 50%, a household might rationally elect less than the full $7,500 to preserve some creditable expense. At a 20% or 35% credit rate against a 32% combined FSA benefit, it almost never pays to.
The credit percentage, and the caps nobody expects
The credit's own arithmetic changed for 2026 as well, and it is worth being able to reproduce. The applicable percentage now starts at 50% — up from 35% — and falls one point for each $2,000 of AGI over $15,000, or fraction thereof, which means rounding up rather than down. That first phase-down stops at a 35% floor, reached at about $43,000 of AGI. A second phase-down then takes one further point per $2,000 of AGI over $75,000, stopping at 20%, which arrives at about $103,000. On a joint return only the second stage doubles: $150,000 and $4,000, putting the 20% floor at about $206,000. The first stage uses the same $15,000 threshold and $2,000 increment for single and joint filers alike, which reads like a drafting oversight and is what the statute says — anyone implementing it will assume they have made a mistake. Two other features surprise people. The expense cap is a household figure and not a per-child one, so three, four or five children still cap creditable expense at $6,000 while the bill goes on scaling; large families get proportionally less from this credit than from almost any other. And the FSA is use-it-or-lose-it with no carryover, so an over-election against a bill you do not incur is money forfeited rather than deferred. Elect to the bill, not to the limit.
Frequently asked questions
How much does daycare cost per month?
The national average for center-based infant care is about $1,311 a month and about $1,046 for a four-year-old, from Child Care Aware of America's 2025 Price & Supply report. Two caveats matter more than the figures. The prices were collected between December 2024 and March 2025 even though the report was published in May 2026, so they are older than the label suggests. And the state spread is enormous — under $7,000 a year in the cheapest states against over $28,000 in the District of Columbia — so the national average is a benchmark to correct, not an answer.
Can I claim the Child and Dependent Care Credit and use a dependent-care FSA?
Technically yes, practically not in 2026. IRC section 21(c) reduces your creditable expense dollar for dollar by whatever the FSA excluded from income. The creditable cap is $3,000 for one qualifying child and $6,000 for two or more; the FSA limit is now $7,500. So a household that maxes the FSA has zero creditable expense left — for one child and for four alike. This is new: at the old $5,000 limit a two-child family kept $1,000 of creditable expense and a small credit alongside it.
Which is worth more, the FSA or the credit?
For almost every household, the FSA. It comes out of gross pay, so it escapes income tax and the 7.65% of Social Security and Medicare together — worth roughly 32 cents on the dollar at a 24% marginal rate. The credit is worth between 20% and 50% depending on income, is capped at $3,000 or $6,000 of expense, and is non-refundable, so it cannot exceed the tax you actually owe. Only a household with very low AGI, where the credit rate is near 50% and the income tax rate is near zero, comes out the other way.
What changed for 2026?
Two things, both from P.L. 119-21, enacted 4 July 2025 and effective for tax years beginning after 31 December 2025. The dependent-care FSA limit went from $5,000 to $7,500 ($3,750 married filing separately). And the credit's top percentage went from 35% to 50%, with a new intermediate floor at 35% and the old 20% floor kept at the bottom. The $3,000 and $6,000 expense caps did not change. IRS Publication 503 for 2026 will not appear until early 2027, and the edition on irs.gov describes the superseded rules.
How is the credit percentage calculated?
It starts at 50% and falls one point for each $2,000 — or fraction thereof, so round up — of AGI over $15,000, stopping at 35%. Then it falls one more point for each $2,000 of AGI over $75,000, stopping at 20%. On a joint return only that second stage doubles: $150,000 and $4,000. The first stage uses the same $15,000 and $2,000 for single and joint filers, which reads like a drafting oversight and is what the statute says. In practice the 35% floor arrives at about $43,000 and the 20% floor at about $103,000 single or $206,000 joint.
Is the $6,000 cap per child?
No — it is a household figure. One qualifying child caps creditable expense at $3,000; two children cap it at $6,000; three, four or five children still cap it at $6,000. So the credit stops scaling after the second child while the bill keeps going, which is why large families get proportionally less from it than anyone expects.
What happens if I over-elect the FSA?
You lose it. A dependent-care FSA is use-it-or-lose-it with no carryover and no grace beyond the plan's run-out period. Elect to the bill you will actually incur, not to the limit — the page flags it when your election exceeds your childcare spending.