Dependent Care Tax Credit VS. Dependent Care Spending account

Dependent Care Tax Credit vs. Dependent Care Spending Account

Use the charts below to help determine which option is best for you. Keep in mind that each person’s tax situation is unique, therefore you may want to consult you tax advisor before enrollment.

Single, Head of Household
2 Eligible Dependents $6,000 in Dependent Care expenses

ADJUSTED GROSS INCOME

OVER

$10,000

$39,000

BUT NOT OVER

$39,000

$182,000

BEST OPTION

Tax Credit

*Spending Account

*Refers to $5,000 under Cafeteria Plan and $1,000 tax credit

Single, Head of Household
1 Eligible Dependent $3,000 in Dependent Care expenses

ADJUSTED GROSS INCOME

OVER

$10,000

$39,000

BUT NOT OVER

$39,000

$182,000

BEST OPTION

Tax Credit

Spending Account

Single, Head of Household
1 Eligible Dependent $5,000 in Dependent Care expenses

ADJUSTED GROSS INCOME

OVER

$10,000

BUT NOT OVER

$182,000

BEST OPTION

Spending Account

Married, filing Joint
2 Eligible Dependents $6,000 in Dependent Care expenses

ADJUSTED GROSS INCOME

OVER

$14,000

$39,000

BUT NOT OVER

$39,000

$200,000

BEST OPTION

Tax Credit

*Spending Account

*Refers to $5,000 under Cafeteria Plan and $1,000 tax credit

Married, filing Joint
1 Eligible Dependent $5,000 in Dependent Care expenses

ADJUSTED GROSS INCOME

OVER

$10,000

BUT NOT OVER

$131,000

BEST OPTION

Spending Account

The above charts are intended for illustrative purposes only and is not intended to constitute legal or accounting advice. The above charts do not substitute for personalized professional tax advice. Each person’s tax situation is unique. Prior to enrolling in the Dependent Care Spending Account, each person is encouraged to consult with their personal tax advisor.