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Dependent Care Account. This account reimburses you for expenses associated. with the care of your children or other dependents while. you (and your spouse) work or attend school full-time. The. maximum annual amount allowed for this plan is $5,000. or $2,500 for married taxpayers filing separate returns.
For work-related dependent care expenses, the tax credit amount is determined by applying a percentage to your total dependent care expenses. According to current tax structure, generally the tax credit is more beneficial than a dependent care spending account if your family income is under $25,000. Keep in mind that contributions for an FSA are taken out of your pay before taxes are applied, thus reducing your gross salary and your taxable income.