What is a Dependent Care FSA?
A Dependent Care FSA (DCFSA) is a pre-tax benefit you can use to pay for dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare.
Who is eligible?
If offered by your employer, you are eligible for this benefit.
You and your spouse must be working, searching for work, or attending school full-time in order to qualify for the DCFSA.
Eligible expenses include:
- Dependent services rendered while an employee is at work or school
- Services for a dependent who is 13 years old or younger, or who is over the age of 13 and is physically or mentally incapable of self care
How are DCFSAs funded?
DCFSAs start with a $0 balance when they’re opened and funded with contributions made each pay period over the course of the plan year.
You can only spend the money that’s currently available in your account. If you file a claim that’s more than your balance, you’ll be reimbursed up to the full amount you have available. The remaining amount will be reimbursed as additional contributions are made each pay period..
Can I change the amount I contribute to my DCFSA?
DCFSA holders can change their contributions during open enrollment or if you experience a qualifying life event (QLE) during the plan year.
How long do I have to spend my DCFSA money?
Normally, you lose any unspent money at the end of the plan year. However, your employer might offer certain features with your DCFSA to help you not lose any money:
- If your employer offers a run-out period, you have a specified amount of time after the end of the previous plan year to file claims for expenses incurred in the previous plan year (for example, you could file a claim in 2024 to use 2023 money on licensed daycare center fees in 2023.)
- If your employer offers a grace period, you have up to 2.5 months after the end of the previous plan year to use unspent money on eligible dependent care expenses during the current plan year (for example, you could use 2023 money on licensed daycare center fees in 2024.)