Dependent Care FSA

You may use a Dependent Care Flexible Spending Account (FSA) to be reimbursed for day care expenses for your dependents so that you and your spouse, if you are married, can work or attend school.

By using the FSA, you can be reimbursed for dependent day care expenses for:

  • Your dependent children including your biological children, adopted children or stepchildren, up to age 13.

  • An elderly parent, spouse, or child who is incapable of self care, who spends at least eight hours a day in your home and is dependent on you for support.

Dependent Care FSA: Use It or Lose It

Tax advantage accounts have certain tax advantages. Therefore, the IRS regulates all tax advantage accounts. By law, any funds not used for services during the year will be lost. In other words, you need to use the money in your account or you'll lose it. See the www.irs.gov website for the complete list of qualified expenses, Publication 503.

Managing Your Account

  • View your account activity and balance online

  • Request an electronic check, one time or recurring bill payments, such as orthodontics

  • Update your contact information

  • Order additional debit cards(HSA, Limited Purpose, and HealthCare Debit Card option)

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Amount Available for Reimbursement

Dependent Care FSA funds are available only when you have these funds in your account. For example: if you submit a claim for $1,000, but have only $300 available in your FSA, you will only be reimbursed $300.

Maximum Contribution to Your Dependent Care FSA

You may contribute up to $5,000 a year to this account.  If you are married and file income taxes separately, your contributions to the Dependent Care Account are limited to $2,500 annually.  In addition, the most you can contribute to the dependent care FSA cannot be more than you or your spouse's income. If your spouse is a full-time student or is incapacitated, special income assumptions apply as follows: If you have one dependent, your spouse's income is considered to be $250 per month ($3,000 per year), or $500 per month ($6,000 per year) if you have two or more dependents.

Changing your dependent care FSA contribution amount mid-year can only occur if you experience a qualifying status change. Contact Farm Credit Foundations for more information.

Eligible Dependent Care Expenses

Eligible dependent care FSA expenses include:

  • Day care provided in a home, day care center or preschool, subject to certain legal requirements
  • Adult day care facility
  • Before- and after-school expenses through grade school for children under age 13
  • Nanny or au pair
  • Care for children when they are sick and you are at work
  • Summer day camp

Visit PayFlex’s website for a list of eligible and non-eligible expenses.

 

Tax Information

  • IRS regulations govern the administration of all spending accounts and restrict the way in which money in FSA accounts can be used.
  • IRS prohibits using spending accounts to pay the health care insurance premiums of another plan.
  • Not all expenses allowed on tax returns are eligible for FLEX reimbursement.
  • Dependent Care expenses allowed for tax return purposes are listed in the Internal Revenue Service (IRS) publications 502 and 503. 
  • See the www.irs.gov website for more details

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