Childcare Tax Credits FAQ

You can each have separate FSA accounts, but the combined household contribution from both accounts cannot exceed $5,000 per year (if you are married filing jointly). If you both contribute $5,000 each, the excess ($5,000) becomes taxable income when you file.

Coordinate with your spouse during Open Enrollment to stay within the household limit. A common approach: one spouse contributes $5,000 and the other elects $0 for the Dependent Care FSA (they can still enroll in a health FSA).

Yes — the Georgia state credit is 30% of whatever federal credit you receive, even if that amount is small. If your federal credit is only $200 (because most of your expenses were covered by FSA), Georgia adds $60 more. Small, but it's free money that requires no extra work.

The Georgia credit is claimed automatically when you file Georgia Form 500 and carry over the federal credit amount. If you use tax software, this is handled automatically.

If your employer does not offer a Dependent Care FSA, you unfortunately cannot open one independently — they must be employer-sponsored. However, you still have access to:

• The federal Child and Dependent Care Credit (up to $600 for 1 child, $1,200 for 2+ children at 20% rate)
• The Georgia state credit (30% of your federal credit)

Without an FSA, you can apply the full expense cap to the federal credit — $3,000 for 1 child or $6,000 for 2+ children. This results in a higher federal credit than if you had used an FSA first.

Dependent Care FSA funds that you don't spend by the end of the plan year (typically December 31) are forfeited — you lose that money permanently. Unlike health FSAs, Dependent Care FSAs cannot roll over to the following year.

Some employers offer a grace period (until March 15 of the following year) to incur eligible expenses. Check your plan documents to confirm whether a grace period applies to your account.

To avoid forfeitures: estimate conservatively, track your spending throughout the year, and remember that summer day camps and after-school programs are eligible if you need to spend down a balance before year-end.

When you leave an employer, your Dependent Care FSA typically ends with your employment (unlike health FSAs, which may be continued via COBRA). You generally have a run-out period (usually 90 days) after termination to submit claims for eligible expenses incurred while you were still employed.

If you start a new job mid-year with an employer that offers a Dependent Care FSA, a job change is a qualifying life event that allows you to enroll in the new employer's FSA outside of Open Enrollment. Your total contributions across both FSAs for the year still cannot exceed $5,000 (joint).

Yes. To claim the federal Child and Dependent Care Credit, you must report each provider's Taxpayer Identification Number (TIN) on IRS Form 2441. For licensed daycare centers, this is their Employer Identification Number (EIN). For individual providers (nannies, babysitters), it's their Social Security Number or Individual Taxpayer Identification Number (ITIN).

Under IRS rules, providers are required to furnish their TIN if you request it. You can ask your daycare for:

• IRS Form W-10 (Dependent Care Provider's Identification and Certification)
• A letter with their EIN on company letterhead
• A year-end statement that includes their EIN

The easiest way is to simply ask the director or office manager of your daycare center. Say: "I need your EIN for IRS Form 2441 for the dependent care credit." Most licensed centers deal with this request frequently and can provide it immediately.

Alternatively, ask for a year-end childcare expense statement — many centers automatically issue these in January showing total amounts paid and their EIN. You can also check your past FSA reimbursement documentation, which may include the provider's EIN.

For Georgia DECAL-licensed centers, the EIN is a standard part of their operating records and they are accustomed to providing it to parents for tax purposes.

No. You can only claim the federal Child and Dependent Care Credit and Dependent Care FSA benefits for amounts you personally paid out of pocket. Childcare expenses paid by CAPS (Georgia's Childcare and Parent Services program) or any other government assistance do not qualify — you cannot "double dip" by claiming tax benefits for money the government already paid on your behalf.

However, if you pay a co-pay under CAPS, or if you pay additional amounts above what CAPS covers (for example, extra hours or higher-cost providers), those amounts you pay personally do qualify for the tax benefits.

Day camps qualify. Overnight camps do not.

Day camps for children under age 13 — including sports camps, art camps, STEM camps, and general summer day programs — qualify for both the federal Child and Dependent Care Credit and the Dependent Care FSA, as long as the purpose of the care is to allow you (and your spouse) to work.

Overnight camps (sleep-away camps) do not qualify under either benefit, even if the camp is educational or enriching.

Academic tutoring, private lesson fees, and enrichment programs that are primarily educational rather than childcare also generally do not qualify.

Yes. Both before-school and after-school care programs for children under age 13 qualify for the federal Child and Dependent Care Credit and the Dependent Care FSA. This includes:

• School-based before/after-school programs (ASP programs)
• Privately run after-school care centers
• YMCA or community center after-school programs
• Individual babysitters or nannies who provide after-school care

The key requirement is that the care must be for a child under 13 and must enable you (and your spouse) to work. Transportation costs for childcare do not qualify separately.

For most taxpayers in 2026, the federal Child and Dependent Care Credit is non-refundable. This means it can only reduce your federal income tax liability to zero — any excess credit above your tax liability is not paid out as a refund.

Similarly, the Georgia state childcare credit is generally non-refundable for most income levels — it can reduce your Georgia tax to zero but not below.

The Dependent Care FSA is different: it's not a credit at all. It reduces your taxable income before your tax is calculated, so you benefit regardless of whether you owe taxes.

Federal:

• IRS Form 2441 (Child and Dependent Care Expenses) — attached to your Form 1040
• Your W-2 from your employer (Box 10 shows any employer-provided FSA benefits)
• Your provider's name, address, and EIN

Georgia:

• Georgia Form 500 (Individual Income Tax Return)
• Schedule 2 of Form 500 (Other Credits) — where the Georgia childcare credit is claimed
• In some years, Georgia Form IT-213 (Child Care Expense Credit) may be required separately — check the current Georgia DOR instructions

Most tax software (TurboTax, H&R Block, TaxAct, FreeTaxUSA) handles all of these forms automatically when you enter your childcare expense information. You don't need to fill out the forms manually.

The federal Child and Dependent Care Credit and the Georgia state childcare credit are both annual tax credits — you claim them when you file your tax returns for the year, not mid-year.

For 2026 childcare expenses: you file your federal Form 1040 and Georgia Form 500 in early 2027. The standard deadline is April 15, 2027 (unless you file an extension).

The Dependent Care FSA works differently — it's set up in advance during your employer's Open Enrollment (typically October–November for the coming year) and deductions happen throughout the year from each paycheck. You receive the tax benefit gradually as money is withheld pre-tax.

Self-employed individuals — freelancers, sole proprietors, LLC owners, and others with self-employment income — can claim the federal Child and Dependent Care Credit and the Georgia state credit just like employees. Self-employment income counts as earned income for qualifying purposes.

However, self-employed individuals typically cannot use a Dependent Care FSA because there's no employer to sponsor the plan. Exceptions:

• If you have a spouse who is a W-2 employee and their employer offers an FSA, your household can contribute through the spouse's employer
• If your business has employees, you may be able to establish a Section 125 cafeteria plan that includes Dependent Care FSA benefits for yourself and your employees

Yes. Payments to a nanny, babysitter, or au pair for childcare of a qualifying child under 13 qualify for both the federal credit and Dependent Care FSA, provided you can document the expenses and the provider's tax information.

Important household employer consideration: If you pay a nanny or regular babysitter $2,700 or more in 2026 (the household employer threshold), you may become a household employer and need to withhold and pay payroll taxes. This includes:

• Filing Schedule H with your federal return
• Potentially obtaining an EIN for yourself as a household employer
• Providing a W-2 to the nanny by January 31

Even if you have these obligations, you can still claim the childcare tax credits for the amounts paid. Consider using a nanny payroll service (like HomePay or SurePayroll) to handle the compliance requirements.

No — you can only claim expenses paid for care provided before your child's 13th birthday. The qualifying age limit applies at the time the care was provided, not at year-end.

If your child turned 13 on August 1, you can claim expenses for childcare provided from January 1 through July 31 (before the birthday). Expenses for August onward do not qualify.

Keep records of exactly when care was provided and make sure you're not claiming expenses for months when the child was already 13.

You can claim the credit for expenses paid for childcare during the months when both you and your spouse had earned income (or were full-time students). During periods of maternity/paternity leave where you received no earned income, the expenses for those months may not qualify.

However, if your leave was paid (you received wages or salary while on leave), that counts as earned income. Unpaid leave months are trickier — consult IRS Publication 503 or a tax professional for your specific situation.

Also note: having a new child is a qualifying life event that allows you to enroll in a Dependent Care FSA mid-year (or change your election) without waiting for Open Enrollment.