How to get a tax break for summer child care
Paying for camp, sitters, and schedules on top of your work week is a lot. The good news is that there are simple ways to cut the cost. This guide keeps it easy and points you to the best path for your family.
Quick answer
There are two main ways to save on summer child care:
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Dependent Care FSA at work. Put up to $5,000 per household in pretax dollars ($2,500 if married filing separately) toward eligible care.
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Child and Dependent Care Credit on your return. Worth 20% to 35% of qualifying costs, up to $3,000 per child or $6,000 total.
You cannot use the credit for the same dollars your FSA reimbursed. Choose one path per dollar.
Option 1: Dependent Care Flexible Spending Account (DCFSA)
This is an employer benefit that lets you set aside pretax dollars for eligible child care. Your contributions are not subject to income, Social Security, or Medicare taxes.
Annual limits
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Up to $5,000 per household
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$2,500 if married filing separately
Who qualifies
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Your dependent qualifying child who was under age 13 when the care was provided.
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Your spouse who was physically or mentally incapable of self-care and lived with you for more than half of the year, or
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Your dependent who was physically or mentally incapable of self-care and lived with you for more than half of the year.
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You (and your spouse if filing jointly) must have earned income to take the credit or exclude dependent care benefits from your income.
Timing to enroll
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Usually during your employer’s open enrollment or after certain life events
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Use funds by year end or your plan’s deadline or you may forfeit what’s left
What counts
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Licensed child care providers. You will need the provider’s tax ID for reimbursement.
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Summer day camps like soccer, art, robotics, and similar daytime programs.
What does not count
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Overnight camps
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Tutoring or summer school
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Care that is not work‑related
Option 2: Child and Dependent Care Credit
This is a credit on your tax return for a percentage of work‑related child care expenses.
How much
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35% of eligible costs if your AGI is $15,000 or less
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Phases down as AGI rises; 20% at $43,000 AGI or more
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Count up to $3,000 of costs for one child or $6,000 for two or more
Example: Two kids, $3,000 each in qualifying costs. At 20%, your credit is $600 per child. Total $1,200 off your tax.
Important
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The credit is not refundable
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You cannot claim costs reimbursed by an FSA
DCFSA vs. Credit: which saves more?
FSA example
Contribute $5,000 to your DCFSA.
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In the 22% federal bracket, you save $1,100 in income tax
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Plus 1.45% Medicare and up to 6.2% Social Security tax savings
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Possible state tax savings too
Credit example
Skip the FSA and claim $5,000 at 20%. You save $1,000 in federal tax.
Rule of thumb: The FSA often wins once you include payroll tax savings, but run your own numbers.
Simple summer checklist
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Check your benefits. If your employer offers a Dependent Care FSA and you can enroll, start there.
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Confirm eligibility. Child under 13. Both spouses working if married. Care is so you can work.
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Pick your path. Compare FSA vs. Credit. No double counting.
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Keep records. Provider name, address, tax ID, receipts, and camp invoices.
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Know what qualifies. Day camps count. Overnights and tutoring do not.
Common mistakes to avoid
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Missing open enrollment for the FSA
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Forgetting the provider’s tax ID for reimbursement
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Claiming overnight camp or tutoring
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Double-counting FSA‑reimbursed costs for the credit
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Assuming the credit pays you if you owe no tax
Bottom line
Summer care is a big lift, but you have two solid ways to save.
If your job offers a Dependent Care FSA, that is often the best first move. If not, use the Child and Dependent Care Credit when your expenses qualify.
Choose one path for each dollar, keep clean records, and give yourself a little breathing room this summer.