Your dependent care flexible spending account is a reimbursement account offered by your employer as part of your benefits package. Enrolling in a dependent care FSA plan saves you money. It allows you to use pre-tax dollars to pay for eligible FSA expenses, such as day care, preschool, or after-school care for a qualified individual.
Participation in a dependent care FSA is your choice. If you decide to sign up, you must satisfy any FSA eligibility requirements set up by your employer. Upon enrollment, your employer will provide a Summary Plan Description (SPD) that gives the complete rules and regulations for your plan.
Dependent care FSAs are regulated by IRS rules for Section 125 plans and Section 129 plans. Some rules are specific to a dependent care FSA and do not apply to a health FSA.
Important: Please review the following information so you are aware of the rules that apply to your dependent care FSA. Use the links below to navigate to a specific section.
Your dependent care expenses must be for a qualifying individual – someone who spends at least eight hours in your home. This includes:
If you are divorced, IRS guidelines state that a child is a qualified dependent of the “custodial parent.” Only the custodial parent may participate in a dependent care FSA. A divorced, non-custodial parent cannot be reimbursed under a dependent care FSA, even if the divorced parent claims the child as a tax dependent.
Only eligible expenses can be reimbursed under the FSA. These expenses are defined by Internal Revenue Code (§)129 and your employer’s plan.
Dependent care expenses must be incurred during the coverage period so you (and your spouse, if married) can work or look for work. Full-time students who attend school for at least five months during the tax year may also incur dependent care expenses. “Work” may include actively looking for work, but it does not include unpaid volunteer work or volunteer work for a nominal salary.
A dependent care FSA covers qualified dependent care expenses incurred for the care of one or more qualifying individuals.
Expenses reimbursed under your dependent care FSA cannot be used to claim any federal income tax deduction or credit.
Need more information or expense examples? Go to our Dependent Care FSA Eligible Expenses page.
The election is your contribution amount — the amount that you put into your dependent care FSA when you enroll. Your employer determines the minimum (if any). The maximum election amount is set by the IRS and is $5,000, or $2,500 if you are married but file taxes separately.
The amount of reimbursement that you receive on a tax-free basis during the plan year cannot exceed your earned income or your spouse’s earned income. If you are single, your earned limitation is your salary (minus your dependent care FSA contributions). If you are married, the earned income limit is the lesser of your salary (minus your dependent care FSA contributions) or your spouse’s salary.
Your total FSA election amount is deducted from your paycheck in equal amounts throughout the year. You can use your dependent care FSA funds during the plan year as long as funds are in your account.
Important: The availability of your election amount differs for a dependent care FSA and a health FSA. With a health FSA, your election amount is available on the first day of the plan year. However, your dependent care FSA funds are only available as the money is deducted from your paycheck.
A Request for Reimbursement Form is used to submit a reimbursement claim. After you complete the Request for Reimbursement Form, submit it to CONEXIS along with appropriate supporting documentation.
All dependent care reimbursement requests must include a completed and signed provider certification (noted on the reimbursement form). If you do not have provider certification, complete the reimbursement form and submit an itemized statement from the dependent care provider that includes:
Credit card receipts, canceled checks, and balance forward statements do not meet the requirements for acceptable documentation.
The maximum reimbursement you may receive is equal to the current account balance in your dependent care FSA. If your reimbursement request is more than your available balance, the remaining amount will be placed in a pending status. The pended amount will be paid when additional funds are posted to your account.
Find a Request for Reimbursement Form by logging in to your online account.
Submit your reimbursement requests these ways:
Your election cannot be changed during the plan year, unless you experience a qualifying change in status event based on IRS regulations, such as:
Your requested change must be due to and consistent with the event. You may change or terminate your dependent care FSA election only if:
You may also change your dependent care FSA election when an independent, third-party provider (other than a relative) significantly increases or decreases the cost of dependent care or when there is a coverage change, such as using another provider.
Important: Not all plans allow you to change your election when you experience one of the events listed above. For more information regarding eligible status change events under your plan, see your Summary Plan Description (SPD).
Your FSA contributions are subject to the IRS “use-it-or-lose-it” rule. Any unused funds that remain in your dependent care FSA will be forfeited at the end of the plan year. FSA funds do not rollover to the following year. The unused funds cannot be paid to you in cash or other benefits.
Some FSA plans include a run-out period and a grace period extension. See our Run-out and Grace Period page for further details.
If you terminate your employment during the plan year or you otherwise cease to be eligible under the plan, your active participation in the FSA plan and your pre-tax contributions will end automatically. Expenses incurred after your termination date are not eligible for reimbursement.
Your dependent care FSA plan may include a “spend-down” provision that allows you to submit dependent care expenses incurred after your termination, assuming you continue to meet all other participation requirements.
Important: The run-out period, grace period, and spend-down feature is not available in all plans. Please see your Summary Plan Description (SPD) for specific rules governing your plan.
Important: The information on the CONEXIS website provides basic information regarding participation in your employer’s FSA plan. Our site does not contain all of the rules that are specific to governing your employer’s plan. For complete rules and plan information, review your plan’s Summary Plan Description (SPD). Ask your HR or benefits representative for details.