Flex Plan Tax Break for Child Care Costs

You can still claim the dependent care credit to the extent your expenses are more than the amount you pay through your flexible spending account.

The maximum amount of dependent care costs you can fund through a flexible spending account (FSA) is $5,000.  But the credit applies to as much as $6,000 of expenses for filers with two or more kids under age 13.

In that case, you’d run the first $5,000 of dependent care costs through the FSA, and the next $1,000 would be eligible for the credit on Form 2441.  For most filers in this situation, taking the credit will save an extra $200 in taxes.