US Tax Code Ignores Increase in Child Care Costs: Alexis Leondis

Over the last four decades, the cost of child care has skyrocketed in the US. It now takes up almost 20% of median family income per child in major cities. But the tax benefit some workers use to offset those day care or nanny expenses has stayed the same — since 1986! When the amount was temporarily increased during Covid, it only became more obvious that the cap was hopelessly outdated.

Many working parents take advantage of what is called a dependent care flexible spending account through their employers. Almost 60% of employers offer dependent care FSAs. The account is similar to ...