This year the dependent tax credit is seeing substantial enhancements. Now it’s up to 50 % of expenses up to 8000 in a refundable credit. Since it’s now 50% vs 20% ... I’m wondering if it makes more sense to to claim the credit vs the dependent flex care account which is now increased to 10,000 I think.
We have already used about 4000 of dependent flex money this year and that will be it. We will end up with about 14000 in childcare expenses. So we could still max out the dependent flex account with the new open season or... should we take the approximate 5000 credit instead?
Our AGI is about 107,000 mfj so we should qualify. Benefits are so great this year I’m considering getting a nanny for our twins instead of daycare since I’m leaving at least 3000 credit on the table.
Summary question: is it now more tax efficient to take the tax credit vs dependent flex account?