Whether you’re caring for a child or an adult, a Day Care Flexible Spending Account can help you save money. The account allows you to put aside up to $5,000 annually in pre-tax dollars to pay for day care expenses for eligible family members, so that you can work.
How Much Can I Save?
If you maximize your account, you can save between $500 and $1,980 in taxes each year, depending on your tax bracket.
Who’s An Eligible Family Member?
- Your children under age 13
- Family members of any age who are mentally or physically incapable of caring for themselves, and whom you claim as a dependent on your federal income tax return
- An adult, if you pay more than half of his or her care costs during the year
What Are Eligible Expenses?
In general, you can use your Day Care Flexible Spending Account to reimburse yourself for day care expenses that allow you (or you and your spouse) to work, look for work, or go to school full-time. Eligible expenses include:
- Fees for licensed day care or adult care facilities
- Babysitting or nursery school fees for care provided in or outside your home
- Placement fees for a dependent care provider, such as an au pair
- Summer day camp for children under age 13 if attendance allows you and your spouse to work, look for work, or attend school full-time
- Before- and after-school care programs
- Payment to a relative (age 19 or older who is not your dependent) to care for your eligible dependent
- Payment to a housekeeper whose duties also include dependent day care
What Expenses Are NOT Eligible?
- Babysitting fees for any other reason not related to enabling you and your spouse to work, look for work, or attend school full-time
- Food, clothing, and entertainment for a dependent care provider
- Child support payments
- Activity fees and educational supplies
- Overnight camp
- Cleaning and cooking services not provided by a caregiver
- Late payment fees
What If My Spouse Also Has An Account?
If your spouse also works and is eligible for a Day Care Flexible Spending Account through his or her employer, you are limited to contributing $5,000 per household per year to a Day Care Flexible Spending Account.
How Do I Enroll?
If you have a stay-at-home spouse or partner, you can’t participate in a Day Care Flexible Spending Account.
If you are enrolled in a Day Care Flexible Spending Account and go on a leave of absence, your contributions will stop. You will need to re-enroll when you return.
You may receive reimbursement for eligible expenses up to the amount in your account at the time you submit your claim. Expenses can be incurred until March 15 of the following plan year, and you have until June 15 to submit claims.