Dependent Care Expense Worksheet

Your individual circumstances and income will determine whether the federal, state (where eligible) and Social Security tax savings under the Dependent Care Spending Account provide greater tax benefits than using the federal tax credit. Since individual tax situations vary, it is important for you to select which approach offers more favorable tax savings. Contributions to the Dependent Care Spending Account reduce your federal tax credit availability. As of January 1, 2003, you may combine the Dependent Care Spending Account with the tax credit availability amount to a maximum of $3,000 for one dependent and $6,000 for two or more dependents.

To get an idea* of how a Dependent Care Spending Account could increase your spendable income, fill in the values in the table shown below and click the Calculate button. You will then be presented with an analysis of your potential savings, compared to taking the income tax deduction. Do not enter dollar signs or commas in the amounts you enter. For example, to enter $1,500 you should type just 1500.

* The calculations used by this worksheet make a number of assumptions. Your actual savings will probably differ from that shown here, but this worksheet can be used to gain a general understanding of how your DCSA can benefit you.

** If you do not have to pay your dependent care provider for those days when your child is absent due to vacation, holiday or illness, remember to subtract those from your estimates. Also, overnight camp sessions for children are ineligible for reimbursement, so do not add these costs to your estimate.