Dependent Care FSA Tax Savings Calculator

See the combined federal, state, and payroll tax savings you unlock by directing pre-tax dollars into a dependent care FSA. Enter how much you plan to contribute and your marginal federal tax rate. Optionally include state taxes and adjust the FICA assumption if your household exceeds the Social Security wage base. The calculator returns your blended tax shield and the effective after-tax cost of care.

Total you plan to set aside for eligible dependent care this year.
Combine your federal bracket and any surtaxes that apply.
Defaults to 0% if left blank.
Defaults to 7.65% to reflect Social Security and Medicare withholding.

Assumes contributions are within IRS limits and expenses qualify for dependent care FSA reimbursement. Consult a tax professional for personalized advice.

Examples

  • $5,000 contribution, 32% federal bracket, 5% state rate, default FICA ⇒ Tax savings: $2,232.50 (44.65% blended rate) • Net after-tax childcare cost: $2,767.50 ($230.63/month)
  • $3,500 contribution, 24% federal bracket, no state tax, FICA reduced to 1.45% ⇒ Tax savings: $890.75 (25.45% blended rate) • Net after-tax childcare cost: $2,609.25 ($217.44/month)

FAQ

Can I use both the dependent care FSA and the child care tax credit?

Yes, but the FSA reduces the expenses eligible for the credit dollar-for-dollar. Use the calculator to size your tax savings, then compare it with the Child and Dependent Care Credit for the remainder of eligible costs.

What happens if I contribute more than I spend?

Unspent balances generally expire at year end unless your plan offers a short grace period. Estimate realistic childcare expenses before electing the contribution amount to avoid forfeitures.

Do FSA reimbursements count as taxable income?

No. As long as you submit eligible dependent care expenses, reimbursements remain tax-free because you already excluded the dollars from wages when making the contribution.

Additional Information

  • The blended tax rate sums federal marginal tax, applicable state income tax, and payroll taxes that the FSA contribution avoids.
  • If your wages already exceed the Social Security wage base, set the FICA field to 1.45 to reflect only the Medicare portion.
  • Dependent care FSA contributions cap at $5,000 per household for most married couples filing jointly; check plan documents for exceptions.

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