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The short answer
Full-day childcare for one child ranged from $6,552 to $15,600 a year across US counties in 2022, the latest Department of Labor data, or 8.9% to 16% of median family income. From 2026 a dependent care FSA through work can shelter up to $7,500 of childcare costs from tax, and the Child and Dependent Care Credit covers 20% to 50% of up to $3,000 of expenses for one child or $6,000 for two or more.
What childcare costs, and why it varies so much
The Department of Labor's National Database of Childcare Prices covers 2,512 counties. Its November 2024 release found full-day care for one child cost between $6,552 and $15,600 a year in 2022, depending on the county, age and type of care, and that the median price of centre-based infant care was higher than median rent. Prices have moved since 2022, so treat these as a floor and get quotes locally.
Three things drive the bill:
- Age. Infant care is the most expensive; school-age care before and after school costs less.
- Setting. A licensed centre usually costs more than a home-based provider.
- Place. The same care costs more in a large metro county than in a smaller one.
Many Nigerian families mix three kinds of care
- Paid care
- A centre, a licensed home provider or a nanny. Predictable, costs the most.
- Family care
- A grandmother visiting from Nigeria for a few months, or a relative already in the US. Saves money but has limits, below.
- Shift-splitting
- Parents working different shifts, common among nurses and carers. Costs nothing in cash but a great deal in sleep.
Budget for the paid care you would need if family help fell through. A visa refusal or a sick grandparent can leave you needing a place at short notice.
Tax help: the dependent care FSA
A dependent care FSA (also called a dependent care assistance programme) lets you pay for childcare from your salary before income tax. P.L. 119-21 raised the maximum excluded amount to $7,500 from 2026, up from $5,000 ($3,750 if married filing separately), according to the IRS. You choose an amount during your employer's enrolment window and claim it back with receipts, so ask HR whether your employer offers one.
Tax help: the Child and Dependent Care Credit
The credit is worth 20% to 50% of qualifying expenses, depending on your adjusted gross income, on up to $3,000 of expenses for one qualifying person or $6,000 for two or more. That gives a 2026 maximum of $1,500 or $3,000. It is non-refundable, so it reduces tax you owe but does not create a refund (IRS, October 2026). The care must let you, and your spouse if filing jointly, work or look for work, and the child must be under 13.
Worked example
Example only. Funmi and Segun live in Houston with two children, aged 2 and 6, and pay $1,500 a month for care: $18,000 a year. Funmi's employer offers a dependent care FSA.
| Step | Amount |
|---|---|
| Annual childcare | $18,000 |
| Paid through the FSA, before tax | $7,500 |
| Remaining expenses | $10,500 |
| Credit expense limit for two children | $6,000, reduced by FSA money excluded; Form 2441 works out what is left |
| Monthly cost they budget | $1,500, less the tax saved |
How much the FSA saves depends on their tax bracket. The order is what matters: use the FSA first, then let Form 2441 decide whether any credit is left.
Put the figure against income too. If their household earns $90,000 before tax, $18,000 of childcare is 20% of it, above the 8.9% to 16% range the Department of Labor found for one child, because they have two. Seeing that share in writing helps when deciding whether one parent should cut hours, whether a cheaper setting works for the older child, or whether to move the money they send home each month to a different date so it does not land in the same week as the childcare bill.
The grandma-from-Nigeria question
Can you pay a grandparent and claim the credit? The IRS bars certain carers: your dependant, your child under 19, your spouse, and the parent of your qualifying child under 13. A grandmother who is not your dependant is not on that list. But Form 2441 needs the provider's name, address and SSN or EIN, and a visiting grandparent on a visitor visa may have neither, and may not be permitted to work for pay in the US. In practice, care from a visiting grandparent is usually unpaid help, not a claimable expense.
A budgeting checklist
- Get three quotes: a centre, a home provider and after-school care.
- Ask HR about a dependent care FSA and the enrolment date.
- Check your state's subsidies; Texas families can read our guide to Texas childcare subsidies.
- Read the Child Tax Credit guide; it is separate from the care credit.
- Hold a buffer of one month's fees for gaps in family care.
- Keep every receipt with the provider's tax ID.
Where Pryme fits
If you are also paying school fees or supporting family in Nigeria, the Personal Assistant can keep both sets of commitments in view and remind you before each payment, and naira Savings Boxes can hold money set aside in Nigeria.
Questions people ask
How much is daycare in the US per year?
The Department of Labor's latest data, for 2022, put full-day care for one child at $6,552 to $15,600 a year depending on the county, age and setting.
What is the dependent care FSA limit for 2026?
$7,500, or $3,750 if married filing separately, up from $5,000, according to the IRS.
Can I claim childcare paid to my mother from Nigeria?
Not if she is your dependant. Otherwise you need her SSN or EIN for Form 2441, and a visitor may not be allowed to work for pay.
Can I use the FSA and the childcare credit together?
Yes, but not for the same expenses. FSA money reduces the expenses you can count for the credit.
Sources
- US Department of Labor, Women's Bureau: Cost of child care for one child can be more than rent in some US counties (release 24-2396-NAT, 19 Nov 2024) · accessed Oct 2026
- IRS, Correction to the dependent care benefits exclusion amount in the 2026 General Instructions for Forms W-2 and W-3 (updated 11 Sep 2026) · accessed Oct 2026
- IRS, Child and Dependent Care Credit information (updated 15 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.