Estimates only · Not tax advice · Results are illustrative and should be reviewed with a qualified tax advisor.
Rates based on 2026 MFJ federal tax brackets. · This calculator assumes half of childcare spend is exempt from payroll tax under IRC §129, but actual treatment may vary depending on plan structure and employee elections. · The calculator automatically determines whether claiming the federal §45F credit or taking a full deduction produces greater tax savings, and computes results accordingly.
Important: Business owners are eligible for the §45F federal and NYS §44 tax credits on their own childcare, but not the tax deduction. Because childcare expenses deducted at the company level are picked up as income on the owner's personal return, the deduction and the income offset each other — leaving no net deduction benefit. Credit savings still apply to owner childcare; deduction savings apply to employee childcare only. Additionally, the §129 payroll tax exemption on up to $7,500 of childcare benefits may or may not apply to owners at the personal level — this depends on whether the plan passes the IRC §129 non-discrimination tests. If the plan favors highly compensated employees or owners, the tax-free treatment may be lost for those individuals.