Dependent care credit increased from $6000 to $16000 for 2 or more kids

Can’t read the whole article, is there an income limit on this? And how would it screw us that have the $5K limit? Just not being able to get more?

LINK

I found this article without the pay wall. It looks like employers can choose to increase the maximum amount for their dependent care plans but it doesn’t happen automatically. I’m sure HR departments everywhere are still sorting through this but I intend to check in with my benefits department if I haven’t heard anything by end of April.

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We pay 30k in child care a year, and this doesn't help us

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Yeah, we chose the nanny life and it's expensive!

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While you cannot receive both tax benefits for the same expenses, you may be able to claim both tax benefits if your expenses exceed $5,000. If you have two or more children, you could set aside the first $5,000 pre-tax into an FSA and claim up to $1,000 of remaining expenses for the dependent child-care credit. This means you could potentially collect the higher tax savings allotted through an FSA but not be limited to the FSA's maximum of $5,000.

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This was before. So I'm going to assume it stays the same way. But there's tax guys in here and hopefully they can reassure you.

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Yeah, we chose the nanny life and it's expensive!

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daycare for us.

Does private school count as dependent care? And why or why not?

I think up to or through Kindergarten. I haven't read up on it in a few years though. Guess I need to peruse the subject again since he's starting school.

Eligible Expenses

ETA: Preschool Yes. Tuition No.

Y'all need to pay attention to this. The amount that can be used has increased to $8,000 for one kid, or $16,000 for 2 or more kids. Companies may increase the dependent care account contribution max, but that may not be the greatest idea. Why?

For most people, the dependent care account is a better deal than the credit, because when your AGI hits 43K, the credit percentage drops to 20 percent. Many people with dependent care accounts have a marginal tax rate higher than that, so they get a better deal using the account.

However, this tax bill, for 2021 only, also raises the top credit percentage all the way to 50%, and doesn't start to drop below 50% until AGI hits $125,000. It then drops 1 percentage point per 2K of excess AGI until it gets down to 20 percent. Then, it freezes until you hit 400K of AGI, and then it continues the 1 percentage point drop per 2K of AGI until it fully phases out.

So... some of you may now be in a position where the credit actually makes more sense than the account.

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Dependent care credit increased from $6000 to $16000 for 2 or more kids by LSU6262

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That's not much of a discount

Not sure of the exact breakdown on our but we have two full time (1&4) and one part time - pre and after school (6). So we just drop all three there and daycare will drop and pick up the oldest one to/from school as well as holidays etc.