If you’re a caretaker for a child or dependent adult, you know that quality dependent care can be expensive. Why not make it a little less taxing by removing the tax component? With a Dependent Care Flexible Spending Account (Dependent Care FSA), you set aside pretax dollars through automatic paycheck deductions — and reduce your taxable income in the process.
How It Works
- Make convenient paycheck contributions. The money comes out of your paycheck before taxes, which lowers your taxable income, so you owe less to the IRS and your state and local governments.
- Contribute from $100 to $5,000 per year (this is a combined limit between you and your spouse). Note: If the IRS considers you to be a “highly compensated employee,” these limits are subject to change. Your annual contribution is divided equally and deducted from your paycheck throughout the year.
- Use for lots of eligible expenses, including daycare facilities, in-home babysitting, day camp, after-school care, and practical nursing care for an adult. View the full list of eligible expenses.
- Any unused funds are forfeited. You’ll lose any unused funds remaining in your Dependent Care FSA after the claims deadline.
- Submit expenses for qualifying dependents, including your children under age 13, disabled adults (e.g., spouse, parent) in your care, or another dependent who is physically or mentally incapable of self-care, so that you or your spouse can work or attend school full time.
- Submit claims by the deadline. The deadline to submit for reimbursement of 2022 expenses is March 31, 2023.
Tip! You can submit claims for eligible expenses for any amount up to your annual contribution. However, unlike the Health Care FSA, you’ll only be able to receive what’s in your account at that time.
Managing Your Account
Everything related to your FSA can be done through the Smart-Choice website (available through Benefits In-site). There’s even an app for your mobile phone. Simply download “Smart-Choice Mobile” from the App Store or Google Play, and then use the app to:
- view your account balance and other account information;
- submit claims for reimbursement;
- upload photos of expense receipts; and
- get alerts about actions you need to take.