Compare daycare types, estimate annual costs, and calculate tax savings with CDCTC and Dependent Care FSA.
Weekly rates are national averages adjusted by state. Actual costs vary significantly by location and provider. Tax savings simplified — consult a tax professional.
The credit rate is not a smooth slope: it holds at 50% until $15,000 of AGI, then gives up one percentage point for every full $2,000 above that, and never falls below 20% (reached at $75,000). The rate is only half the story though — it is applied to capped expenses of $3,000 per child, so the dollar credit is far smaller than the headline percentage suggests.
The Alvarez family has one toddler in a licensed daycare center in California, 40 hours a week, with $80,000 of household income. They want to know the real annual damage after tax help.
To compare childcare costs: enter your state, child age, hours needed, and household income — the tool prices six care types, applies the Dependent Care FSA and child care tax credit, and ranks all options by net annual cost.
FreeToolHub Childcare Cost Calculator is a free browser-based tool that compares daycare, nanny, au pair, and other childcare costs with CDCTC and FSA tax savings, no signup.
Compare 6 childcare types, estimate annual costs by state, calculate tax savings with CDCTC and Dependent Care FSA. Free, no signup.
This calculator compares the real annual cost of six childcare arrangements: center-based daycare, in-home daycare, a full-time nanny, a nanny share, an au pair, and relative care. You enter your state, child age, hours needed per week, and household income. The tool applies state-level cost benchmarks, which vary enormously, infant center care runs roughly $12,000 a year in Mississippi-adjacent markets and above $22,000 in Massachusetts and California, then layers in the tax side most families miss: the Child and Dependent Care Tax Credit of up to 20 to 35 percent of qualifying expenses depending on income, and the Dependent Care FSA, which excludes up to $5,000 of childcare payroll from income tax. The result is a net-cost ranking of all six options after tax savings.
Expecting parents building a budget before parental leave ends use it to see whether two incomes still win after childcare, the go-back-to-work math that surprises many households. Families comparing a nanny against daycare get the true gap, since nanny costs split across a nanny share often undercut center prices for two children. Parents deciding whether to fund a Dependent Care FSA during open enrollment see the break-even against the CDCTC, because using both on the same dollars has interaction rules. Relocating families compare states side by side before choosing where to land. HR benefits teams occasionally use it to explain the FSA to employees with plain numbers.
(1) Select your state and each child's age, since infant care is the most expensive tier everywhere and prices ease at preschool ages. (2) Enter weekly hours needed; full-time is roughly 40 to 50 hours, and nanny economics change sharply below 30. (3) Enter household income, which drives the CDCTC percentage and the FSA value at your marginal bracket. (4) The engine prices all six care types for your state, applies the tax credits each household qualifies for, and ranks them by net annual cost, with a per-child breakdown for multi-child families, where nanny economics improve most because center prices multiply while a nanny's salary does not.
The Dependent Care FSA excludes up to $5,000 per household of childcare spending from income tax and most payroll taxes, so its value scales with your bracket, roughly $1,100 to $1,900 of savings for a typical household. The CDCTC is a credit, worth 20 percent of up to $3,000 of expenses for one child or $6,000 for two, so its ceiling is $600 to $1,200, but it is refundable in part and works for lower incomes where the FSA's use-it-or-lose-it risk hurts. The key rule: the same dollars cannot fund both; FSA money must be subtracted before the CDCTC calculates. For most households above the 22 percent bracket with stable predictable childcare, the FSA wins; below that, or with variable summer-camp-style costs, the credit is safer. The calculator shows both applied to your actual numbers.
Infant center-based care averages roughly $14,000–$17,000 per year nationally, ranging from about $12,000 in low-cost states to over $22,000 in Massachusetts and California. Toddler and preschool care runs 10–20% less.
For one child, a full-time nanny ($35,000–$55,000+) costs more than daycare. For two or more children, or when split through a nanny share, nanny economics improve sharply because center prices multiply per child while a nanny's salary does not.
An au pair costs roughly $22,000–$28,000 per year including stipend, agency fees, and program costs — competitive for full coverage plus light housework, but limited to 45 weekly hours and requiring a spare bedroom.
Up to $5,000 per household per year of childcare spending is excluded from income tax, saving roughly $1,100–$1,900 depending on bracket. The same dollars cannot also claim the Child and Dependent Care Tax Credit.
Six types: daycare center (most common, $9,000-$25,000/year by state), family daycare (home-based, 20-40% cheaper), nanny ($15-$30/hour + taxes), nanny share (split cost with another family), au pair ($19,000/year stipend + agency fees), and relative/family care. The tool shows annual costs for each type based on your state.
Yes. It calculates savings from the Dependent Care FSA (2026 limit: $5,000 pre-tax, saves ~$1,200-$1,800 in taxes depending on bracket) and the Child and Dependent Care Tax Credit (CDCTC: 20-35% of qualifying expenses up to $3,000 for one child, $6,000 for two+). It shows which strategy saves more based on your income.
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