What child care costs in the US
Child Care Aware of America and HHS data
Child Care Aware of America reports that the national average price of child care was $13,184 a year in 2025, up from $13,128 in 2024 (Child Care in America: 2025 Price & Supply, May 2026). That is about $254 a week. Infant care in a center costs more: the same report puts it between $15,015 and $15,728 a year, depending on the method.
That average takes about 10% of median income in a two-parent household and about 33% in a single-parent household. The US Department of Health and Human Services (HHS) set 7% of family income as an affordability benchmark in its 2016 Child Care and Development Fund rule. A 2024 rule made it a co-payment cap; a May 2026 rule (91 FR 25796) removed that cap.
Prices differ a lot by state, so use your own quote in the calculator below.
Work vs Childcare Net Income Calculator
Net pay after care, commute and tax
How it works: gross pay = hourly pay × hours. Tax = gross pay × tax rate. Net = gross pay − tax − childcare − commuting. Effective hourly pay = net ÷ hours. Default childcare: the 2025 national average ($13,184 ÷ 52). For the tax rate, use your federal bracket plus 7.65% payroll tax plus your state rate. Credit and FSA savings are not included. Educational estimate, not tax advice.
The Child and Dependent Care Credit
Federal tax credit, 26 U.S.C. 21
The credit returns part of what you pay for care of a child under 13 while you work or look for work. It covers up to $3,000 of expenses for one child and $6,000 for two or more. Your expenses also cannot be more than your earned income, or the lower of the two incomes if you are married and file jointly.
The One Big Beautiful Bill Act (Public Law 119-21) raised the top credit rate from 35% to 50% for tax year 2026. The $3,000 and $6,000 limits did not change.
| Adjusted gross income (AGI) | Tax year 2025 rate | Tax year 2026 rate |
|---|---|---|
| $15,000 or less | 35% | 50% |
| $15,001 to $43,000 | 34% down to 21% | 49% down to 36% |
| $43,001 to $75,000 ($150,000 joint) | 20% | 35% |
| $75,001 to $105,000 ($150,001 to $210,000 joint) | 20% | 34% down to 20% |
| Over $105,000 ($210,000 joint) | 20% | 20% |
The rate drops 1 point for each $2,000 (or part) of AGI over $15,000. For 2026, a second step starts above $75,000 ($150,000 joint): 1 more point per $2,000 ($4,000 joint), down to 20%. Sources: IRS Publication 503 (2025), 26 U.S.C. 21 as amended.
Example: one child, $3,000 of care and a 2026 AGI of $40,000 gives 13 steps, a 37% rate and a $1,110 credit. The credit is nonrefundable.
Dependent Care FSA limits
Pre-tax money for care, 26 U.S.C. 129
If your employer offers a dependent care flexible spending account (FSA), you can set aside pay before tax to cover child care. The limit per household was $5,000 for 2025 ($2,500 if married filing separately). From tax year 2026 it is $7,500 ($3,750 if married filing separately), under the same 2025 law.
FSA money skips federal income tax and the 7.65% Social Security and Medicare tax. You cannot count the same dollars twice: tax-free FSA benefits reduce the $3,000 or $6,000 credit limit dollar for dollar. If you put the full $7,500 in an FSA, no expenses remain for the credit.
Which one helps more?
- On a 22% federal bracket plus 7.65% payroll tax, each FSA dollar saves about 30 cents, before any state tax.
- At an AGI of $15,000 or less, the 2026 credit pays 50 cents per dollar, but only if you owe enough tax to use it.
Questions parents ask
Can I use a dependent care FSA and the Child and Dependent Care Credit together?
Yes, but not on the same dollars. Tax-free FSA benefits reduce the $3,000 or $6,000 expense limit for the credit dollar for dollar. If you exclude the full $7,500 in 2026, no expenses remain for the credit, even with two or more children.
Does the Child and Dependent Care Credit give me a refund if I owe no tax?
No. The federal credit is nonrefundable. It can reduce your income tax to zero, but the IRS does not pay out the unused part.
What child care costs count?
Care for a qualifying child under 13 that lets you (and your spouse) work or look for work: day care, before- and after-school care and day camp. Overnight camp, school tuition from kindergarten up, and care that is not work-related do not count.
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