How the Tax Code Shapes Your Child Care Costs in 2026

Lucas and Luna break down the tax-side economics of child care in 2026: how the Child and Dependent Care Credit now covers up to $4,000 per child, the shift from nonrefundable to fully refundable under the 2025 TCJA extension, and why the phaseout threshold at $150,000 in adjusted gross income leaves many middle-income families with only a partial benefit. The hosts walk through a real scenario for a two-earner household in Austin, Texas, comparing the credit against a Dependent Care FSA, and discuss how the effective marginal tax rate on a second earner's income can exceed 40 percent when child care costs are factored in. They also touch on the proposal to expand the credit to $6,000 per child that failed in the last Congress and what it means for family budgets today. A sharp, number-driven episode for anyone trying to understand why child care is a tax story as much as a labor story. #ChildCareCredit #TaxPolicy #ChildAndDependentCareCredit #DependentCareFSA #TCJA #MarginalTaxRate #TwoEarnerHousehold #MiddleClassTaxBurden #AustinTexas #FamilyBudget #RefundableCredit #Phaseout #Economics #TaxReform #ChildCareCosts #FexingoBusiness #BusinessPodcast #TaxPolicyPodcast Keep every episode free: buymeacoffee.com/fexingo