How the 50% to 20% rate works in 2026
The rate starts at 50% at AGI of $15,000 or less, steps down to 35%, then down to a 20% floor after $75,000 ($150,000 joint).
Under the amended IRC §21, the applicable percentage is 50%, reduced (but not below 35%) by 1 point for each $2,000 or fraction of AGI over $15,000, then further reduced (but not below 20%) by 1 point for each $2,000 ($4,000 joint) of AGI over $75,000 ($150,000 joint).
Examples: AGI $0 → 50%. AGI $45,000 → 35%. AGI $95,000 single → 25%; joint → 35%. AGI $210,000 joint → 20%.
Your payments stay on your computer
Carefold reads your care-payment file with JavaScript in this browser tab. Nothing is uploaded, and closing the tab clears it.
How it works
- List your childcare payments in the template (or any CSV or Excel sheet): qualifying person, provider and amount. Drop it here, or try the sample.
- Enter filing status, AGI, earned income and W-2 box 10, then read the Form 2441 credit, the DCFSA exclusion and every note.
- Copy the lines onto Form 2441 and keep the provider TINs with your return.
FAQ
Is my data uploaded?
No. Your files are read by JavaScript in your browser tab and never sent to us or anyone else. Payment rows aren't stored, so closing the tab clears them. Settings can be saved in this browser.
What does Carefold do?
It reads your childcare payments, works out the 2026 child and dependent care credit percentage, the dependent care FSA exclusion under IRC §129, and the Form 2441 figures you need — including when the exclusion wipes the credit.
What expenses count?
Amounts you paid so you (and your spouse if filing jointly) could work or look for work: day care, before- and after-school care, and day camp. Overnight camp and kindergarten-and-up schooling generally do not. See Pub. 503.
How does the 2026 rate work?
It starts at 50% for AGI of $15,000 or less, steps down (not below 35%) by 1 point per $2,000 over $15,000, then further down (not below 20%) after $75,000 ($150,000 joint). Expense caps stay $3,000 / $6,000.
What's free?
Importing any number of payments, the Form 2441 credit, the DCFSA exclusion, every note, the first 8 rows and the first 2 people on screen and in print (with a footer). Pro shows and prints everything and exports the Excel workbook and CSVs.
DCFSA or the credit?
FSA dollars come out pre-tax up to $7,500 in 2026. The credit is 20–50% of up to $3,000/$6,000 of expenses left after the exclusion. Carefold shows both on one worksheet.
What isn't covered?
State credits, household-employee payroll (Schedule H), and whether a specific person qualifies under the age or disability tests. Form 2441, Pub. 503 and a tax professional come first.
Is this tax advice?
No. Carefold applies the rules it describes to the numbers you provide. It is a worksheet to check against Form 2441.