Childcare rates can seem very high.  If you have a child in day care, the federal government provides two options to cut day care costs: the Child Care Tax Credit, and a Day Care Flexible Spending Account (DCFSA). But it’s important to choose wisely, as you can choose only one of these methods to cut day care costs.

With a Flexible Spending Account, you can cut daycare rates $1,030 or more in when compared to the Child Care Tax Credit. To be eligible, you simply need to have one child enrolled in a day care, or after school program; be in the 25% tax bracket or higher; and pay payroll taxes.

This program allows you to pay up to $5,000 of your childcare expenses using pre-tax dollars. Even if you have more than one child in day care or preschool, and your tax bracket is different, you can still find many different ways to cut day care costs with a Day Care Flexible Spending Account.