HOW YOUR DEPENDENT CARE FSA WORKS
The Dependent Care FSA lets you use tax-free dollars to pay for the day care expenses that enable you and your spouse to work or attend school full time. This can include the care for your children or any elder dependents for whom you provide primary care.
IRS code has set the maximum contribution for the Dependent Care FSA at $5,000 per household. Therefore, if your spouse has a Dependent Care FSA as well with his/her employer, your combined election amount cannot exceed $5,000.
Dependent Care FSAs are not "pre-funded" like the Medical FSA, so the funds are only available to spend once they have been payroll deducted.
ELIGIBLE DEPENDENTS
The rule in qualifying an individual as an eligible day care recipient is set by the IRS. Currently this is defind as a dependent for whom you provide 50% of their care and claim them on your income taxes. If these conditions are met, the dependent must fall into one of the following categories:
- A child age 12 or younger
- Your child or an elder family member who is physically or mentally incapable of caring for himself or herself and who you claim as a dependent on your income tax return
- Your spouse who is physically or mentally unable to care for himself or herself
Following is a list of eligible expenses:
- Care inside your home
- Care outside your home
- Pre-school tuition
- Before school care
- After school care
- Nursery school
- Day camp fees
- Day care facility fees
When choosing a provide, remember that the provider must report day care income on their taxes to be considered eligible. If you have any questions regarding this benefit, please call ASI customer service at (800)659-3035.
