Dependent Care FSA
A Dependent Care Flexible Spending Account (FSA) is like a financial ally for parents or caregivers. It's a special account that allows you to set aside pre-tax dollars from your paycheck to cover qualified childcare expenses for your dependents, like children or disabled relatives.
You contribute to a Dependent Care Flexible Spending Account (FSA) through salary deductions from your paycheck—up to $5,000 annually or up to $192.31 per bi-weekly paycheck.
You can use your Dependent Care FSA to pay for eligible child daycare or elder care expenses so you (and your spouse, if married) can work. These include:
- Childcare expenses
- Before- and after-school programs
- Summer camps
- Care for elderly family members
- Disabled dependent care
- and more
Note: Review IRS Publication 503 for a more detailed list of eligible dependent care expenses.
Three FSA rules to know
- You must actively enroll during Open Enrollment if you want to participate in an FSA.
- If you don’t spend all the money in your FSA by the deadline, any unused money in your account(s) will be forfeited. You have until June 30, 2026 to submit claims for expenses incurred between January 1, 2025 and March 15, 2026. This is called the IRS “use it or lose it” rule.
- You are required to provide supporting documentation for claims (such as the tax ID number for caregivers), so keep your receipts!
And two ways a Dependent Care FSA is different from a Healthcare FSA.
- Unlike a Healthcare FSA, your available balance is limited to the amounts actually deducted from your paychecks during the year. You can still submit receipts for expenses that exceed your available balance, but you will receive reimbursement as your contributions post from each paycheck until the expense has been fully reimbursed.
- Dependent Care FSA funds CANNOT be used for healthcare expenses for your children or family members. You should contribute to a Healthcare FSA or HSA for those expected costs.
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