The dependent care FSA limit for 2027 is $7,500 per household, or $3,750 if you are married and file separately. It is the same as 2026 and up from $5,000 in 2025. The amount is written into the law itself (Public Law 119-21, section 70404), with no end date and no yearly inflation adjustment, so it does not wait for an IRS announcement each fall. One catch: your employer's plan is allowed to set a lower cap, so check the number in your enrollment materials.

That answers the search. The rest of this guide is what parents ask next: what the account pays for, how you get your money back, the rules that quietly cost families money, and a calculator that compares the FSA with the childcare tax credit for your own numbers. It is general information, not tax advice.

The numbers in one place

The IRS repeats the new number in Publication 15-B (2026). The Congressional Research Service notes the amounts are not adjusted for inflation. Careful with older pages: several IRS pages written for tax year 2025 still show $5,000.

What a dependent care FSA pays for

The test is simple: the care must be for a child under 13 (or a spouse or dependent who can't care for themselves), and it must be what lets you work or look for work. The details are in IRS Publication 503.

Day camps count, which matters more than it sounds: the school year has about 26 weekdays when school is closed or lets out early, and the day camps that cover the closed ones are eligible. So is the after-care that covers early release days.

Five rules that cost parents money

1. One limit per tax return, not one per parent. If you file jointly, $7,500 is the total for both of you, even with two employers. Each payroll system sees only its own plan, so nothing stops you both from electing the maximum. Anything over the limit is added back as taxable income when you fill in Form 2441.

2. Use it or lose it, with no rollover. Money left at the end of the plan year is forfeited. Unlike a health FSA, a dependent care FSA cannot carry money into the next year. Your employer may offer a grace period of up to two and a half months (IRS Notice 2005-42), and a separate deadline for sending in last year's claims. Both are set by your plan. Ask for the two dates now and put them on the calendar.

3. You are paid back after the care happens, and only up to what you've put in. A health FSA makes the full year's amount available on day one. This account does not. Under IRS guidance, care counts when it is provided, not when you are billed or pay, so prepaying next month's daycare does not speed anything up. Expect to pay the provider yourself and claim it back as your paychecks fill the account.

4. Your election is locked for the year, with exceptions your plan chooses. The rules let a plan allow a change after a birth or adoption, marriage or divorce, a job change, a child turning 13, a new care provider, or a real change in what care costs (Treasury Regulation 1.125-4). The plan does not have to allow any of them, and the deadline is the plan's, not the IRS's: many plans give 30 days from the event, and federal employees get 60. If your daycare bill drops, call HR that week.

5. The lower earner's income caps the benefit. If you're married, both of you must be working or looking for work (a full-time student or a spouse who can't care for themselves is treated as earning a set monthly amount), and you can't exclude more than the lower-paid spouse earned.

The paperwork that gets you paid

• From the provider: name, address and taxpayer ID (a business's EIN or a person's Social Security number). Form W-10 is the IRS form for asking; you keep it, you don't file it. An invoice on letterhead that shows the tax ID works too.

• For each claim: a receipt or statement that shows who was cared for, the dates of care and the amount. Ask the daycare whether it sends a monthly statement; that one document usually covers it.

• A grandparent or nanny: the same three details, including their Social Security number. If you pay a nanny $3,000 or more in 2026, you are also a household employer and owe payroll taxes (Publication 926).

• If a provider won't give a tax ID: fill in what you have and attach a statement that you asked. The IRS calls this due diligence, and it protects your benefit.

• At tax time: your W-2 shows the benefit in box 10, and you file Form 2441, Part III, even if you claim no credit.

FSA or the childcare tax credit?

You can't use the same dollars for both. The Child and Dependent Care Credit counts up to $3,000 of expenses for one child or $6,000 for two or more, and every FSA dollar reduces that cap. Put the full $7,500 in the FSA and there is no credit left.

Calculator loading. If it doesn't appear, the two examples below show how the comparison works.

The credit also changed for 2026 (section 70405 of the same law): the rate now starts at 50% for the lowest incomes, is 35% for most middle incomes, and falls to 20% for joint filers above about $206,000. Two examples, for a family with two children and at least $12,000 of care costs, federal taxes only:

The FSA figure is $7,500 times your bracket plus 7.65% for Social Security and Medicare. Roughly: lower brackets often do better with the credit, higher brackets with the FSA. State taxes and your other credits can change the answer, so run your own numbers or ask a tax preparer.

How much to elect

Elect what you are sure to spend on care that will actually happen during the year, not the maximum by default. In the 22% bracket, a full $7,500 saves about $2,224 in federal tax. But a family that elects $7,500 and uses only $3,900 forfeits $3,600, and ends up about $1,376 worse off than if they had skipped the account. Count the months, count the camp weeks, and leave out anything you're not sure about. Care stops counting once a child turns 13, so check birthdays before you pick a number.

One more thing to decide in advance: who does this. The receipts, the claim form and the deadline are a recurring job, and in most homes it lands on whoever opened the first email. It is the same pattern as deciding who stays home when a kid is sick. The Mental Load Calculator shows how much of that kind of work sits with one of you; it takes about three minutes.

Where Zazu fits

Zazu lives in WhatsApp and iMessage. With your permission it reads the family's email and calendars, so when the daycare's monthly statement or the plan's "claims due" reminder arrives, both parents hear about it, and Zazu asks who is sending the claim. It asks before it acts. It does not file claims and it does not give tax advice. Free for 7 days, then $19 a month.

Paying for care is one half of the job. Deciding who handles the forms, the pickups and the sick days is the other half. If you want to see how that is really split in your home, play Who does it?, a free 60-second game for couples: each of you says who handles ten everyday jobs, then you see both answers side by side.

How we checked: every number here comes from the law or an IRS publication, linked above, read on October 1, 2026 and re-checked on October 6, 2026 (the IRS had not yet published the 2027 inflation adjustments; the dependent care limit is set by statute and does not change with them). The IRS's 2026 Form 2441 and its instructions were still drafts on that date; the law is final. Plans differ on grace periods, claim deadlines and mid-year changes, so your plan document is the last word. If you spot something wrong, email hello@getzazu.io and we'll fix it.