Can I still claim the Child and Dependent Care Tax Credit if I use a Dependent Care Account?

Short answer: Yes, but not for the same expenses. Any child or dependent care costs reimbursed through a Dependent Care Account must be excluded from the expenses you claim for the tax credit.

You can use both a Dependent Care Account (DCA) and the Child and Dependent Care Tax Credit in the same tax year, but you cannot “double dip” by using the same dollars for both.

The tax credit applies to a percentage of up to $3,000 of qualifying expenses for one dependent, or $6,000 for two or more. Any amount you exclude from income through a DCA reduces that $3,000/$6,000 limit dollar-for-dollar, so only expenses above what your DCA reimbursed can count toward the credit.

For 2026, the One Big Beautiful Bill Act made two important changes: it raised the DCA exclusion limit to $7,500 (from $5,000), and it increased the credit’s top rate to 50% (from 35%), with the rate phasing down as income rises (to 35%, then 20%). Because the $7,500 DCA limit now exceeds the credit’s $6,000 expense cap, running the full DCA amount through generally leaves no expenses available for the credit.

For example, if you have two or more qualifying dependents, the credit applies to up to $6,000 of expenses. If you exclude $4,000 through a DCA, your remaining credit limit is $2,000 ($6,000 − $4,000), so you can claim the credit on up to $2,000 of additional unreimbursed expenses. If instead you run the full $7,500 DCA limit, the $6,000 credit cap is reduced to zero and no credit remains.

Which approach saves more depends on your income, tax bracket, and total care costs. Higher earners often benefit more from the DCA (a pre-tax salary reduction that also avoids FICA tax), while lower- and moderate-income families may benefit from the larger 50% credit; some families optimize by combining both.

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Content history
Originally published: June 16, 2025
Last reviewed: June 16, 2026

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