Dependent Care Flexible Spending Accounts (FSAs)

When you enroll in a dependent care FSA, you set aside money from your paycheck on a pretax basis for eligible child and adult care expenses. Your expenses must be work-related. This means that your dependents need the care so that you can work. During the plan year, you’ll pay for your eligible dependent care expenses out of pocket. Once your dependent receives the care, you can submit a claim to pay yourself back from your FSA. You can do this online, through the PayFlex Mobile^® app, or complete a paper claim and fax or mail it to us.

A dependent care FSA does have a few rules that you should know:

• If you’re married, both you and your spouse must be working. If just one of you is working, the other spouse must be actively looking for work; be a full-time student; or be unable to care for him or herself. Unpaid or minimally paid volunteer work doesn’t qualify as employment.
• The expenses must be for a qualifying person. A qualifying person is your dependent child who is younger than age 13 or a spouse or tax dependent who is not physically or mentally able to care for him or herself.
• You must receive these services from an eligible care provider. This can include a licensed childcare facility, an adult day care center or a summer day camp. Check your plan for further details.
• The care provider can’t be your tax dependent, your child who is under age 19 at the end of the year, a person who was your spouse any time during the year or the parent of your qualifying person.
• The expenses must be for services you received during the plan year and while the qualifying person regularly spends at least 8 hours each day in your home.
• The expenses can’t be for future services. For example, you pre-pay your child’s summer day camp. You can’t receive reimbursement until after your child attends the camp.
• The Internal Revenue Service (IRS) annual contribution limit is $5,000. However, reimbursement is limited to the lesser of your earned income for the year or the cost of care, up to $5,000. If you’re married, this limit is based on the income of the lower paid spouse and whether you file joint or separate tax returns.
• Even if you have a dependent care FSA, you must file Form 2441, Child and Dependent Care Expenses, with your federal tax return.

You can view a list of common eligible expenses on this website. You can also find more information in IRS Publication 503.

Typically, the most that you can contribute to a dependent care FSA is $5,000. This is per household per year. This means that if you and your spouse each have a dependent care FSA, you’re limited to $5,000 between you. Keep in mind, this amount may be less based on earned income and tax filing status. For example, if you’re married and filing taxes separately, your individual contribution limit is $2,500.

You can submit a claim at any time during the plan year. However, you can only receive reimbursement after the dates of service.

Example: You pre-pay your dependent care provider every Friday for the following week. To receive reimbursement, you must wait until the end of the next week to submit your claim.

When you submit a claim, we need the detail for that expense. You only need to send one of the following with your claim form:

• A completed Dependent Care FSA Claim form that your provider signs. The form must include dates of service, name of dependent, cost of care, and the provider’s name. You don’t need to include documentation if your dependent care provider signed the form.
• An itemized statement that includes the dates of service, name of dependent, cost of care, and the provider’s name.

Yes. When you have a dependent care FSA, you must include this information as part of your tax return. You’ll do this on IRS Form 2441: Child and Dependent Care Expenses. For more information, see instructions for IRS Form 2441 at www.irs.gov. Your employer will also list your contributions on your Form W-2. If you have questions, you should speak with your tax adviser.

Generally, if you have a dependent care FSA you can’t also take the full tax credit. You should talk to your tax adviser to learn which option is best for you.

You can submit a claim for the full amount. The FSA will reimburse you up to the balance in your account. You’ll only receive reimbursement for the remaining amount if additional contributions are made to your FSA.

This is not an eligible expense. The dependent care must be provided so you can work. Since you’re not working during this period, the day care expense is not reimbursable.

No. Care must be for a qualifying person. A qualifying person includes your dependent child who is younger than age 13. This would only be an eligible expense if your child wasn’t able to care for him or herself.

No. This is not an eligible expense. If the care provider is your child, they can’t be your tax dependent. They must also be 19 or older by the end of the year.