Which is better: a dependent care FSA or a tax credit for childcare expenses?

A dependent care FSA is better for employees who can access it because these pre-tax deductions can substantially reduce the employee’s income, social security and medicare taxes. Plus, it saves even more if your state imposes income tax and other types of taxes. Dependent care tax credit is for those who can’t access a dependent […]

2018 HSA contribution limit

A dependent care FSA is better for employees who can access it because these pre-tax deductions can substantially reduce the employee’s income, social security and medicare taxes.

Plus, it saves even more if your state imposes income tax and other types of taxes.

Dependent care tax credit is for those who can’t access a dependent care FSA through an employer, which often includes part-time employees, commissioned employees, union members, and contract workers.

Check with your health insurance broker, such as Zenefits, if these employees are eligible for a dependent care FSA under your plan.

Dependent Care FSA Maximum Contribution Limits

The maximum contribution for dependent care FSAs married and filing a joint return. The maximum is set at only $2,500 for those who are married and filing separately.

Helpful Links:

Ten Things to Know About the Child and Dependent Care Credit – The IRS provides a list of 10 facts about the dependent care tax credit.

Society for Human Resource Management – Intro to DCAP – Here are the most common expenses covered by a dependent care FSA.

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