Dependent Care FSA Limit 2026: Now $7,500 a Year

Short answer: The dependent care FSA limit for 2026 is $7,500 per year, or $3,750 if you're married and file a separate return. That's up from $5,000 ($2,500 married filing separately), after the 2025 tax law raised the limit for tax years beginning after December 31, 2025. The money pays for care that lets you work, such as daycare for a child under 13, and it isn't taxed as income.

What Is the Dependent Care FSA Limit for 2026?

A dependent care FSA (sometimes called a DCFSA or dependent care assistance program) is an employer benefit that lets you set aside part of your pay for child care or adult day care. The amount you get back for eligible care is excluded from your income, up to a yearly limit.

According to IRS Publication 15-B for 2026, an employee can generally exclude up to $7,500 ($3,750 if married filing separately) of benefits received under a dependent care plan each year. The IRS's child and dependent care credit page confirms the change: the maximum exclusion increased from $5,000 to $7,500, or from $2,500 to $3,750 for married employees filing separately.

Tax year	Limit	Married filing separately
2025	$5,000	$2,500
2026	$7,500	$3,750
2027	$7,500 (no separate IRS figure; see below)	$3,750

If your employer offers a plan, check its maximum during open enrollment.

What Is the Dependent Care FSA Limit for 2027?

The IRS hasn't published a separate 2027 figure. The $7,500 and $3,750 amounts are written into the tax code itself (Section 129), which says the excluded amount "shall not exceed $7,500 ($3,750 in the case of a separate return by a married individual)." FSAFEDS, the flexible spending program for federal employees, lists a maximum of $7,500 per household for its 2027 plan year, with a $100 minimum contribution.

A dependent care FSA is separate from a health FSA, which has its own limit; our guide to HSA vs. FSA covers the health FSA.

How Does a Dependent Care FSA Work?

You choose how much to set aside for the plan year, pay for eligible care, and get reimbursed from the account. Check your own plan's claim process and deadline. FSAFEDS, for example, gives participants a grace period from January 1 to March 15 of the following year to use money left from the plan year.

Your employer reports the dependent care benefits it provides in box 10 of your Form W-2, including any amount over the limit. Under Publication 15-B, benefits above $7,500 are taxable and are added to your wages.

Who Counts as a Qualifying Person?

The care has to be for a qualifying person. The IRS lists:

• A dependent child under age 13.
• A spouse or dependent who is incapable of self-care and lived with you for more than half the year.

The care also has to let you work. Publication 15-B says the services must be for a qualifying person's care and must be provided to allow the employee to work. If you're married, the benefit can't be more than the smaller of your earned income or your spouse's earned income.

What Expenses Can a Dependent Care FSA Pay For?

The IRS and FSAFEDS describe these as the kinds of care that can count:

• Daycare for children, and adult daycare for a qualifying adult.
• Preschool and nursery school.
• Before- and after-school care, including for a child in kindergarten or a higher grade.
• Summer day camps.
• Babysitters or in-home care while you work.

And these generally don't count:

• Kindergarten and school tuition. The IRS says tuition for kindergarten isn't a qualifying expense.
• Overnight camp. IRS Publication 503 says the cost of sending a child to overnight camp isn't a work-related expense.
• Summer school and tutoring. Publication 503 says these programs aren't for care.

Can You Pay a Relative?

Sometimes. Section 129 of the tax code says dependent care benefits don't cover payments to someone you or your spouse can claim as a dependent, or to your own child who was under 19 at the end of the year. For the child and dependent care credit, IRS Publication 503 adds payments to your spouse and to the parent of your qualifying child. A grandparent you don't claim as a dependent, for example, isn't on those lists.

Dependent Care FSA vs. Child and Dependent Care Credit

You may be able to use both, but not on the same dollars. Here's how the two compare for 2026:

	Dependent care FSA	Child and dependent care credit
How it saves you money	Excludes benefits from your income	Reduces your tax by a percentage of your care costs
2026 maximum	$7,500 ($3,750 married filing separately)	Expenses up to $3,000 for one qualifying person or $6,000 for two or more
2026 rate	Not applicable	20% to 50% of qualifying expenses, depending on income
Who sets it up	Your employer	You, on your tax return (Form 2441)

For tax year 2026, the IRS says the credit ranges from 20% to 50% of qualifying expenses. As income rises above $15,000, the percentage gradually decreases to 35%. Above $75,000 of income ($150,000 if married filing jointly), it gradually decreases again, but it doesn't fall below 20%.

How they interact. IRS Publication 503 says dependent care benefits you exclude from income reduce the $3,000 or $6,000 expense limit for the credit. Here's a hypothetical example: a couple with two children in daycare puts $7,500 through a dependent care FSA. Their credit limit is $6,000, and $7,500 is more than that, so none of their care costs are left for the credit. If they had set aside $4,000 instead, they could use up to $2,000 of other care costs toward the credit.

Which choice saves more depends on your income, your tax bracket and your care costs. A tax professional or tax software can run both versions for your family.

What Should You Do at Open Enrollment?

Before you choose an amount:

• Estimate your care costs for the year. Add up daycare, after-school care and day camps, and leave out costs that don't qualify.
• Don't overfund. Check your plan's rules for unused money. FSAFEDS, for example, says money not used by its deadline is forfeited.
• Coordinate with your spouse. FSAFEDS describes its $7,500 maximum as per household, and the IRS limit is $3,750 if you're married filing separately.
• Check whether the plan applies to high earners. If you were paid more than $160,000 in 2025, you may be a highly compensated employee for 2026, and your employer's plan must meet IRS nondiscrimination rules for your benefits to stay tax-free.

The Bottom Line

The dependent care FSA limit for 2026 is $7,500, or $3,750 if you're married filing separately, and the IRS hasn't set a different figure for 2027. If you pay for daycare, preschool or after-school care so you can work, it's worth checking whether your employer offers the plan and how it fits with the child and dependent care credit. To keep your broader family budget on track, see our guides to a sinking fund for planned costs, HSA contribution limits for 2027, and 529 plans vs. custodial accounts for saving toward college. More guides are in our taxes section.

Frequently asked questions

What is the dependent care FSA limit for 2026?

$7,500 per year, or $3,750 if you're married and file a separate return. The limit rose from $5,000 ($2,500 married filing separately) for tax years beginning after December 31, 2025.

Is the dependent care FSA limit per person or per household?

The IRS limit is $7,500, or $3,750 for a married person filing separately, and it can't be more than the smaller of your and your spouse's earned income. FSAFEDS, the federal employee program, describes its $7,500 maximum as per household.

What is the dependent care FSA limit for 2027?

The IRS has not published a different figure for 2027, and the $7,500 amount is written into the tax code. FSAFEDS, the federal employee program, lists a $7,500 maximum for its 2027 plan year.

Can I use a dependent care FSA and the child care credit in the same year?

Yes, but you can't count the same dollars twice. IRS Publication 503 says dependent care benefits you exclude reduce the $3,000 (one person) or $6,000 (two or more) expense limit for the credit.

Can I pay a family member with dependent care FSA money?

Sometimes. Under the tax code, dependent care benefits don't cover payments to someone you or your spouse claim as a dependent, or to your own child who was under 19 at the end of the year.

Sources

1. 26 U.S. Code § 129: Dependent care assistance programs
2. IRS Publication 15-B (2026), Employer's Tax Guide to Fringe Benefits
3. IRS: Child and Dependent Care Credit information
4. IRS Publication 503 (2025), Child and Dependent Care Expenses
5. FSAFEDS: Dependent Care FSA flyer (2027 plan year)

This guide is general information, not personal advice. Your situation may differ, so consider talking with a qualified professional, such as a fiduciary financial adviser, CPA or licensed agent, before making a decision.