Dependent Care Flexible Spending Account

Dependent Care Flexible Spending Account

A Dependent Care FSA (DCFSA) is a pre-tax benefit account used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare.

With a Dependent Care FSA, you use pre-tax dollars to pay qualified out-of-pocket dependent care expenses. The money you contribute to a Dependent Care FSA is not subject to payroll taxes, so you pay less in taxes and take home more of your paycheck.

Dependent Care FSA Eligible Expenses

  • Care for your child who is under age 13
  • Before and after school care
  • Babysitting and nanny expenses
  • Daycare, nursery school, and preschool
  • Summer day camp
  • Care for your spouse or a relative who is physically or mentally incapable of self-care and lives in your home

Managing Your Dependent Care FSA

While your Dependent Care Flexible Spending Account (FSA) is designed to be simple, all Dependent Care FSAs are governed by rules set by the IRS.

Here are easy ways to comply with the rules and get the most out of your Dependent Care FSA.

Know Who’s Eligible

Your Dependent Care FSA can be used to pay for eligible dependent care expenses for:

  • A dependent child(ren) under the age of 13 who resides with you and for whom you are entitled to a personal tax exemption as a dependent
  • A spouse or other tax-dependent who resides with you and is physically or mentally incapable of self-care

Dependent Care Maximum 2022 Contribution: $5,000

  • Carnegie employees may contribute up to $5,000 to a Dependent Care FSA in 2022.  The total amount selected will be divided by the remaining pay periods in the calendar year.
  • Maximum contribution limits change annually based on IRS determinations.

Know What’s Eligible

Your Dependent Care FSA can be used to pay for dependent care services, such as preschool, summer day camp, before or after school programs, and child or elder daycare, so you, and your spouse if you are married, can work or look for work.  It should be noted that fees and tuition associated with kindergarten, elementary and middle school are not eligible for reimbursement.

Keep Your Receipts

The IRS has specific rules for Dependent Care FSAs.  Save receipts for each eligible expense you submit for reimbursement under your Dependent Care FSA.  Make sure receipts include the following five pieces of information:

  1. Patient's Name - The name of the person who received the service.
  2. Provider's Name - The provider that delivered the service.
  3. Date of Service - The date when services were provided.
  4. Type of Service - A detailed description of the service provided.
  5. Cost - The amount paid for the service.

Monitor Your Account

Register with WEX and log into your account regularly to check balances, view claims, verify expenses, upload copies of receipts, and more. Sign up to receive text and email alerts so you won’t miss important notices and always know what’s going on with your account.

Why enroll in a Dependent Care FSA?

  • Save an average of 30 percent on dependent care services
  • Reduce your overall tax burden – funds are withdrawn from your paycheck for deposit into your account before taxes are deducted