Dependent Care FSA Benefit Calculator
See how much a Dependent Care FSA saves by paying childcare with pre-tax dollars, cutting federal, state and payroll tax.
How it works
Tax savings = contribution × (federal rate + state rate + 7.65% FICA)
A Dependent Care FSA lets you set aside up to $5,000 per household from your paycheck before taxes to cover daycare, preschool, or after-school care. Because the money is never taxed, you skip federal income tax, most state income tax, and the 7.65% Social Security and Medicare payroll tax on that amount. The higher your combined marginal rate, the more each pre-tax dollar saves.
Worked example
Contributing the full $5,000 at a 22% federal rate, 5% state rate, and 7.65% FICA avoids 34.65% of tax on that money — roughly $5,000 × 34.65% = $1,733 saved for the year.
Frequently asked questions
How much can I put in a Dependent Care FSA?
Up to $5,000 per household per year ($2,500 if married filing separately). The limit is per family, not per child or per spouse.
Why does an FSA save payroll tax too?
Contributions come out before Social Security and Medicare tax is calculated, so you avoid the 7.65% FICA tax in addition to income tax — a benefit a plain tax deduction does not give.
What happens to unused money?
Dependent Care FSAs are generally use-it-or-lose-it: elect only what you expect to spend on qualifying care, because leftover funds are usually forfeited at year end.
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Educational estimate, not tax advice. Uses recent federal parameters that change yearly and ignores your full situation — confirm with a tax professional or the IRS.