Credits · calculator
The child and dependent care credit in 2026
For 2026 the credit rate rises for most families, and the tax-free employer benefit for care grows to $7,500.
Child and dependent care credit
Credit
$2,100
35% of $6,000
- Expense cap$6,000
- Your rate at this AGI35%
Nonrefundable: it cannot exceed your income tax. Expenses are limited to the lower earnings of the two spouses.
The child and dependent care credit pays back part of what you spend on care for a child under 13, or for a spouse or dependent unable to care for themselves, so that you can work or look for work. From 2026, section 70405 of Public Law 119-21 sets the rate at 50% of expenses, reduced by one point for each $2,000 or part of it of AGI above $15,000 down to 35%, then by one point for each $2,000 ($4,000 joint) above $75,000 ($150,000 joint), down to 20%. For 2025 the rate started at 35% and reached 20% for AGI above $43,000. Expenses still count up to $3,000 for one person and $6,000 for two or more. A married couple with $100,000 of AGI and $9,000 of day care for two children gets $2,100 for 2026, against $1,200 for 2025. The credit is not refundable. Separately, the tax-free dependent care benefit an employer can provide, often through a dependent care FSA, rises to $7,500 (section 70404).
Checked by Radif Partners · Editorial policy · How we calculate
The 2026 rate, step by step
| AGI | Rate (single or HOH) | Rate (joint) | Credit on $6,000, joint |
|---|---|---|---|
| $15,000 | 50% | 50% | $3,000 |
| $25,000 | 45% | 45% | $2,700 |
| $45,000 | 35% | 35% | $2,100 |
| $75,000 | 35% | 35% | $2,100 |
| $100,000 | 22% | 35% | $2,100 |
| $150,000 | 20% | 35% | $2,100 |
| $180,000 | 20% | 27% | $1,620 |
| $250,000 | 20% | 20% | $1,200 |
The table shows why the new law matters most to two groups: families under about $45,000 of AGI, whose rate rises from 35% or less to as much as 50%, and middle-income couples between $45,000 and $150,000, who now keep 35% instead of the 20% that applied above $43,000 under the old rule.
Limits on the expenses
Countable expenses are capped at $3,000 for one qualifying person and $6,000 for two or more, amounts the 2025 law left unchanged. They are also capped at the earned income of the lower-earning spouse: a parent with no earnings generally makes the couple ineligible, unless that spouse was a full-time student or unable to care for himself, in which case the law assigns a deemed income. Married people must file jointly to claim the credit, with an exception for some separated spouses.
Two parents working, one in school
The expense cap is limited by the earned income of each spouse. When one spouse earns $4,000 in a year, only $4,000 of care costs count, however much was spent. A spouse who was a full-time student for at least five months of the year, or who could not care for himself, is treated as earning a set monthly amount for that purpose, which keeps the family eligible. These rules are unchanged by the 2025 law.
The low-income case
A single parent with $30,000 of AGI and $5,000 of care for one child gets 42% of $3,000, a credit of $1,260 for 2026. Because the credit is not refundable, it only helps to the extent there is income tax to absorb it, after the child tax credit has been applied. A family whose tax is already wiped out gains nothing from it, which the refund estimator makes visible.
Sources: sections 70404 and 70405 of Public Law 119-21; IRS Working Families Tax Cuts summary (child and dependent care credit); IRS Form 1040-ES (2026), Estimated Tax for Individuals: What's New and due dates, read on October 11, 2026.