The Power of Saving with a Dependent Care FSA

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. It’s a smart, simple way to save money while taking care of your loved ones so that you can continue to work.

Why enroll in a Dependent Care FSA?

  • Save up to 30% on daycare, afterschool programs, etc…
  • Reduce your overall tax burden – funds are withdrawn from your paycheck for deposit into your account before taxes are deducted

Save

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 end up paying less in taxes and taking home more of your paycheck.

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

See more examples

You can use this calculator to estimate your savings.

How You Get It

You enroll in or renew your enrollment in your Dependent Care FSA through FSAFEDS during Open Season each year.

How to Use it

Step 1:

Decide how much to contribute to your Dependent Care FSA account based on how much you plan to spend in the upcoming year on child or adult care expenses. You can contribute to up to a maximum of:

  • $2,500.00 per year if you are married and file a separate tax return
  • $5,000.00 per year if you are married and file a joint tax return or if you file as single or head of household

The law increased 2021 dependent-care FSA limits to $10,500 from $5,000, offering a higher tax break on top of existing rules allowing more time to spend the money. This law may change after 2021.

Step 2:

After you’re enrolled, your funds are withdrawn automatically from each paycheck for deposit into your account before taxes are deducted. As soon as your account is funded, you can use your balance to pay for many eligible dependent care expenses.

You may only use the funds that are available in your account, not the entire election amount.

Step 3:

Pay for childcare and submit your receipt for reimbursement through your expense report in Salesforce.