Child and Dependent Care Credit 2026: Percentage Table and Phase-Out Rules
The dependent care credit got a major overhaul for 2026. The percentage jumped from 35% max up to 50%, but it phases down based on your AGI in two separate steps. Here's the complete breakdown with tables.
Quick answer
If your 2026 AGI is under $15,000, you can claim up to 50% of your dependent care expenses (capped at $3,000 for one child or $6,000 for two or more). The percentage phases down to 35% around $43,000 AGI, holds flat until $75,000 single or $150,000 joint, then drops again to 20% by $103,000 single or $206,000 joint. Max credit is $1,500 for one child or $3,000 for two or more.
The 2026 Dependent Care Credit Percentage Table
Your AGI determines your credit percentage. Find your income range below.
| Your 2026 AGI | Credit Percentage | Max Expenses | Max Credit |
|---|---|---|---|
| $0 to $15,000 | 50% | $3,000 (one) / $6,000 (two+) | $1,500 / $3,000 |
| $15,001 to $17,000 | 49% | $3,000 / $6,000 | $1,470 / $2,940 |
| $17,001 to $19,000 | 48% | $3,000 / $6,000 | $1,440 / $2,880 |
| $19,001 to $21,000 | 47% | $3,000 / $6,000 | $1,410 / $2,820 |
| $21,001 to $23,000 | 46% | $3,000 / $6,000 | $1,380 / $2,760 |
| $23,001 to $25,000 | 45% | $3,000 / $6,000 | $1,350 / $2,700 |
| $25,001 to $27,000 | 44% | $3,000 / $6,000 | $1,320 / $2,640 |
| $27,001 to $29,000 | 43% | $3,000 / $6,000 | $1,290 / $2,580 |
| $29,001 to $31,000 | 42% | $3,000 / $6,000 | $1,260 / $2,520 |
| $31,001 to $33,000 | 41% | $3,000 / $6,000 | $1,230 / $2,460 |
| $33,001 to $35,000 | 40% | $3,000 / $6,000 | $1,200 / $2,400 |
| $35,001 to $37,000 | 39% | $3,000 / $6,000 | $1,170 / $2,340 |
| $37,001 to $39,000 | 38% | $3,000 / $6,000 | $1,140 / $2,280 |
| $39,001 to $41,000 | 37% | $3,000 / $6,000 | $1,110 / $2,220 |
| $41,001 to $43,000 | 36% | $3,000 / $6,000 | $1,080 / $2,160 |
| $43,001 to $75,000 (single) or $150,000 (joint) | 35% | $3,000 / $6,000 | $1,050 / $2,100 |
| $75,001 to $103,000 (single) or $150,001 to $206,000 (joint) | Phases down from 35% to 20% | $3,000 / $6,000 | Varies |
| Over $103,000 (single) or $206,000 (joint) | 20% | $3,000 / $6,000 | $600 / $1,200 |
How the phase-down works
The credit doesn't drop all at once. Between $43,000 and your upper limit, it decreases by one percentage point for every $2,000 of income above $43,000.
If you're single and earn $75,001, your phase-down starts. For every $2,000 over $43,000, you lose one percentage point. At $103,000 and above, you hit the 20% floor.
For married filing jointly, the phase-down starts at $150,000 and you hit the 20% floor at $206,000.
Expenses that qualify
The credit applies to expenses for care of a child under 13, or any dependent who can't care for themselves. This includes daycare, preschool, summer camp, and after-school care. It does not include school tuition for K-12 or overnight camp.
Expenses are capped at $3,000 for one child or $6,000 for two or more children per year. That cap doesn't change based on your AGI.
Dependent Care FSA coordination
If your employer offers a dependent care FSA, the 2026 limit jumped from $5,000 to $7,500. You can use both the FSA and the credit, but you have to reduce your credit by the amount you put into the FSA.
So if you contribute $7,500 to the FSA, your credit calculation uses only $6,000 in expenses minus the $7,500 FSA contribution, which means you can't claim the credit on top. The FSA usually gives better tax savings anyway because it's pre-tax contributions plus the credit on top of that isn't allowed if you exceed the FSA limit.
Frequently asked questions
What changed about the dependent care credit for 2026?
The maximum percentage went from 35% up to 50% for low-income filers. The phase-out structure also changed to include two separate steps instead of one gradual decline. The FSA limit increased from $5,000 to $7,500 for the first time since 1986.
What's the difference between one child and two or more children?
The expense cap is $3,000 per year for one child (max credit $1,500 at 50%) or $6,000 per year for two or more children (max credit $3,000 at 50%). The percentage is the same regardless of how many kids you're claiming care for.
How does the phase-down work between $43,000 and my upper limit?
For every $2,000 of income above $43,000, your credit percentage drops by one percentage point. At $45,000 it's 34%, at $47,000 it's 33%, and so on until you hit the 20% floor.
Can I use both the dependent care FSA and claim the credit?
You can use both, but you have to subtract the FSA amount from your expenses before calculating the credit. Most people come out ahead using the FSA alone since it's pre-tax and the credit phases down at higher incomes anyway.
What if I'm married filing separately?
You can't claim the credit if you file married filing separately. You have to file jointly to claim it.