The Spot
MONEY MEETS TAX · EPISODE 18
Irvine · June 2026
Money & Tax in this episode
Returning to work · Infant care · Child and dependent care tax rules
“We got a spot.”
Evan looked up from his laptop.
Daisy was standing in the kitchen with Jiwoo against her shoulder, one hand holding her phone.
“A daycare spot?”
Daisy nodded.
“When?”
“June eighth.”
Evan looked at the calendar on the wall.
“That’s soon.”
“That’s why they emailed us.”
She handed him the phone.
The message was short.
An opening in the infant room. Five days a week. Enrollment paperwork attached.
Deposit due Friday.
Evan scrolled down.
Then stopped.
“Two thousand four hundred fifty a month.”
“I saw.”
“That’s twenty-nine thousand four hundred a year.”
Daisy took the phone back.
“You don’t have to annualize everything.”
“I actually think this is one of the times I should.”
Jiwoo made a small sound against Daisy’s shoulder.
Daisy adjusted her without looking down.
“This is the place we liked.”
“I know.”
“The teachers were good. It’s ten minutes away.”
“All true.”
Daisy looked at him.
“You’re making my argument for me.”
“I’m organizing the facts.”
She smiled.
They had visited four places before Jiwoo was born.
At the time, daycare had been a future problem. A number Evan had put into a spreadsheet beside diapers, health insurance, and something labeled OTHER BABY COSTS.
Daisy had laughed at that one.
Now the future problem had a start date.
Her return date was two weeks away.
For months, her days had been organized around feeding, naps, laundry, short walks, and the strange amount of time required to leave the house with one very small person.
She missed work.
Not every part of it.
But enough.
The drawings. The site visits. The moment a room stopped being a collection of measurements and started becoming something she could see.
The small design project she had taken during leave had reminded her of that.
Evan reopened the spreadsheet.
Daisy noticed.
“You kept the childcare tab?”
“Of course.”
“You made that two years ago.”
“I update things.”
She smiled and looked back at the enrollment form.
The monthly total at the bottom of the spreadsheet moved.
For a few seconds, neither of them said anything.
“What happens with the tax credit?” Daisy asked.
Evan clicked into another tab.
“I was looking at that.”
“Of course you were.”
He turned the laptop slightly toward her.
“There’s a child and dependent care credit if we’re paying for care so we can work.”
“So daycare counts?”
“Generally, yes.”
“And that helps with twenty-nine thousand four hundred dollars?”
Evan paused.
“Not twenty-nine thousand four hundred dollars’ worth.”
Daisy laughed once.
“That sounded more realistic.”
“The tax rules only look at a limited amount of expenses for the credit.”
“How limited?”
“Limited enough that we should not choose a daycare based on the tax benefit.”
“Good.”
She handed Jiwoo to him.
“That was not how I was choosing one.”
“I know.”
Evan settled Jiwoo against his chest.
Daisy opened the enrollment form again.
There were questions about feeding schedules, allergies, emergency contacts, authorized pickup.
Then the payment page.
$500 enrollment deposit.
Nonrefundable.
Daisy stared at it.
Evan waited.
“I want to go back,” she said.
“I know.”
“And I also hate this.”
“I know that too.”
She looked at Jiwoo, who had already closed her eyes against Evan’s shirt.
“It feels weird paying someone so I can leave her.”
Evan looked down at Jiwoo.
“We’re paying someone to take care of her.”
Daisy nodded slowly.
“That’s a better sentence.”
“And you’re going back because you want to.”
“Yes.”
He didn’t add anything.
Daisy looked at the screen again.
Then she clicked Pay Deposit.
The confirmation appeared almost immediately.
For something they had talked about for more than a year, it took less than ten seconds.
That evening, Daisy added two things to the calendar.
June 8 — Daycare
June 15 — Back to work
Evan looked over her shoulder.
“You gave yourself a week.”
“I noticed.”
“You planned that?”
Daisy closed the calendar.
“I’m learning from you.”
The Tax Behind the Story
Childcare can become a tax issue when parents pay for care so they can work or look for work. A dependent child under age 13 can generally be a qualifying person for the federal Child and Dependent Care Credit, subject to the other requirements.
Timing matters too. Childcare does not automatically qualify just because a parent is employed. The care generally must enable the parent to work or look for work, so Daisy’s week of daycare before she returns to work may need to be treated separately.
The tax benefit also is not based on the family’s entire childcare bill. For 2026, the federal credit generally uses no more than $3,000 of qualifying expenses for one qualifying person or $6,000 for two or more. The credit percentage depends on income.
Employer dependent-care benefits can matter as well. Beginning in 2026, federal law allows up to $7,500 of qualifying dependent care assistance to be excluded from income for many taxpayers. But excluded dependent-care benefits reduce the expense limit available for the Child and Dependent Care Credit, so the two benefits have to be coordinated.
The tax benefit can reduce the after-tax cost of childcare.
It does not make the childcare decision for the family.
Want the tax rules behind the story?
Childcare Costs: Credit vs. Dependent Care FSA
How the Child and Dependent Care Credit works, when daycare qualifies, how a dependent care FSA changes the calculation, and why federal and California treatment can be different.