Dependent Care Flexible Spending Account
Use your dependent care FSA to pay for daycare, preschool or senior care needed for your tax dependents while you and your spouse work, go to school full time, or look for work. Daycare for Children and Elders
Maximum Annual Amount for the Plan The maximum a household or single head of household may set aside for a dependent care FSA is $5,000. Married couples filing singly may each set aside up to $2,500.
The dependent care FSA can be used to pay for the care of your natural, adopted and foster children who have not reached their 13th birthday (12 years and under) and qualifying relatives who cannot physically or mentally care for themselves. All dependents must live with you for more than half the year. The IRS defines persons as physically or mentally not
Savings
able to care for themselves if they cannot dress, clean, or feed themselves because of physical or mental problems. Also, persons who must have constant attention to prevent injuring themselves or others are considered not able to care for themselves. If a dependent is over the age of 12, Chard Snyder will ask you to provide a letter of medical necessity describing the condition from which they suffer. When Services May be Provided Services must be provided while you and your spouse are at work, looking for work or attending classes as a full-time student. Services must be provided during the current plan year. Easily Access Your Funds Dependent Care FSA Eligible Expenses The IRS determines what expenses are FSA eligible. Eligible expenses are reimbursed if they are incurred by you, your spouse, or your tax dependents during the plan year. The charts below show examples of eligible and ineligible dependent care expenses:
Dependent Care Savings Examples
Annual Tax-free Contribution
$3,000 ($250 Monthly)
$5,000 ($416.33 Monthly)
$979.50 $1,632.50
Total Annual Savings
Savings will vary based on your tax bracket. Examples shown are calculated at 25% Federal and 7.65% Social Security tax savings.
Contact Your Tax Advisor You should contact your tax advisor to discuss how you might use this benefit with the childcare tax credit.
Eligible Expenses
In-Home Babysitter Daycare Center Nursery School
Summer Day Camp Elder Custodial Care Elder Daycare
Outside Babysitter After-School Activities Latchkey Program
Ineligible Expenses
Kindergarten Child Healthcare Expenses Household Help
Virtual Daycare Educational Classes Karate Lessons
Piano Lessons Food Clothing
Am I Eligible for a Dependent Care FSA? To maximize savings, you can enroll in a dependent care FSA with either a health FSA or a limited-purpose FSA. If you are contributing to a Health Savings Account (HSA), you can also enroll in a dependent care FSA.
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