Parents and caregivers want the best care for their families—make your dollars go even further! Enroll in a Dependent Care Flexible Spending Account (DCFSA) and set aside up to $5,000 tax-free for family care, like day care or finding a nanny.
When to Enroll
You can enroll as a new hire during Open Enrollment, or when you have a qualifying life event, such as the birth or adoption of a child. You have to enroll each year.
Whose Expenses Are Eligible?
You can use the account for more than just children—there are many family members eligible for care.
How It Works
- Decide how much you want to contribute—up to $5,000 if you’re married (or up to $2,500 if you’re married and filing separately).
- The money comes out of your paycheck tax-free each pay cycle.
- After you pay for care, submit receipts to get reimbursed—you’re eligible to use your DCFSA in a bunch of ways, such as day care for your child while you’re at work or school.
Carefully plan how much you set aside because you’ll have to forfeit any money left over at the end of the year. We understand the end of the year is a busy time—so does the IRS! If your dependent care receipts pile up, you have until March 31 of the next year to submit claims for the prior year’s eligible expenses.
What You Can Contribute
Contribute up to $5,000 each year. No double dipping, though: If your spouse or domestic partner also has a Dependent Care FSA, your total combined contribution can’t exceed $5,000.
Dependent Care Tax Credit
Some expenses that are eligible for your Dependent Care FSA may also be eligible for a credit on your federal tax return. Keep in mind that you cannot claim the same expenses for the Dependent Care FSA and the tax credit. Talk with your personal tax adviser to determine which alternative is best for you.