Which is better, a DCRA or the Dependent Care Tax Credit?
It depends on your particular tax situation. You may apply up to $3,000 of expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals to your taxes through the Dependent Care Tax Credit. Use the Dependent Care Tax Credit Worksheet to help you determine which option is best for you. If the Federal tax credit is a better option, you will need to file Form 2441 "Child and Dependent Care Expenses" when you file your Federal Income Tax return. The amount of your DCRA election for the Benefit Period will appear in box 10 on your W-2 form.