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Minnesota families paying $1,650/month for daycare can save $2,000-$4,500/year by stacking the federal CDCTC, the state credit (up to $1,050/child), and a Dependent Care FSA. The state credit is refundable.

Minnesota Childcare Tax Credit & Savings Calculator (2026)

Full-time daycare in Minnesota averages $1,650/month ($19,800/year). Here's what you can claim back.

Avg. Daycare Cost

$1,650/mo

Minnesota, center-based infant care

Federal Credit (CDCTC)

up to $3,000

20-50% of $6K max (proposed 2026)

Minnesota State Credit

up to $1,050/child

Refundable • AGI under $54K for full credit

Calculate Your Exact Savings

Enter your income, filing status, and number of kids to see your net daycare cost after all credits and FSA savings.

Open Tax Calculator

Minnesota Childcare Tax Credit Details (2026)

Credit Type

up to $1,050/child

Refundable?

Yes — you get money back even if you owe no state tax

Income Limit

AGI under $54K for full credit

Stacks With

Federal CDCTC + Dependent Care FSA. All three can be claimed together.

Example Savings for a Minnesota Family

1 child, married filing jointly, $19,800/year in daycare. Proposed 2026 OBBA rates.

Income (AGI)	Federal	MN	FSA	Total
$30K	$1,290	$645	$983	$2,918
$50K	$990	$495	$983	$2,468
$75K	$600	$300	$1,483	$2,383
$100K	$600	$300	$1,483	$2,383

Federal rates: proposed OBBA 2026 schedule (50% max). FSA: $5,000 pre-tax, savings include FICA 7.65%. State credit calculations are approximate.

Questions About Minnesota Childcare Tax Benefits

How much is Minnesota's childcare tax credit worth?

Minnesota's childcare tax credit is up to $1,050/child. It is fully refundable, so you get money back even if you owe no state tax. This stacks on top of the federal CDCTC and FSA savings.

How much does daycare cost in Minnesota?

Full-time infant center-based care in Minnesota averages $1,650/month ($19,800/year). Costs vary by city. See our Minnesota daycare cost page for city-level rates.

Can I claim both the federal credit and a Dependent Care FSA?

Yes, but they share an expense pool. If you put $5,000 in your FSA, the max qualifying expenses for the federal credit drops from $3,000/$6,000 to $0/$1,000. In most cases, the FSA saves more per dollar (income tax + FICA savings), so use it first.

More for Minnesota Parents

Minnesota Daycare Costs

City-by-city rates

Minnesota Subsidy Eligibility

CCDF income limits

Interactive Tax Calculator

See your exact savings

Affordability Calculator

% of income going to childcare

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