Dependent Day Care Expenses
The dependent day care FSA can provide significant tax savings if you pay for the care of a dependent in order to work. If you are married, both you and your spouse must be employed (volunteer work does not apply), attending school full-time or looking for work to be eligible.
Please note: Section 125 of the Internal Revenue code states that if you have a child in this plan that reaches the age of 13 during the plan year, the expenses incurred for any day care/after school/summer camp, etc. after that birthday are no longer eligible for reimbursement. Effective within 30 days of your child's 13th birthday, you may modify your contributions for your dependent day care FSA by notifying your HR or Benefits Department.
Eligible Dependent Day Care FSA Expenses
- After school care: Primarily custodial in nature are reimbursable See extended day programs
- Au Pair: amounts paid for the care of a child (Transportation related to an au pair are not reimbursable)
- Babysitter: If not a spouse or dependent of the participant
- Camp: See Overnight Camp, Summer Day Camp
- Day care: Amounts paid to dependent day care center
- Deposits: Allocated to the care of a dependent are reimbursable after the service has been provided.
- Elder care: Amounts paid for the care of a dependent adult who is unable to care for him or herself that are not associated with medical expenses. The dependent must live in your residence for at least eight hours each day
- Extended day programs: Supervised activities for children after the regular school program, which are primarily custodial in nature, are reimbursable
- Kindergarten tuition: Eligible only if the expenses are for the care of the dependent. Not eligible if they are for education of the dependent. If the facility provides both services, an allocation must be made for each service and the portion that is allocated for the care of the dependent is the only portion that is reimbursable.
- Looking for work: Amounts for dependent day care so that the participant, or the participant’s spouse, is able to look for work are reimbursable.
- Nanny fees: Amounts paid to a nanny for the care of a child are reimbursable. Registration fees paid to a nanny service are not reimbursable unless they are specifically allocated to the care of a child and not to materials or other fees.
- Nursery school/ Pre-kindergarten: Reimbursable.
- Registration fees for care: May qualify if it is an expense that must be paid in order to obtain care, after the care has been provided or prorated over duration of the agreement with the provider.
- Relative of participant, expenses paid to – e.g., grandparent of participant: A relative can be an eligible provider if the relative is not: 1) the child’s parent (even if not the participant’s spouse); 2) a dependent for whom the participant/participant’s spouse can claim an exemption; or 3) a child or step-child of the participant under age 19.
- Sick-child center: Eligible if enable participant to work when child is ill.
- Summer day camp: After the child has attended the camp. Supplies, registration, deposit, food, activities, transportation and other costs related to the summer day camp are not eligible for reimbursement.
- Taxes: FICA and FUTA taxes paid to a daycare provider are reimbursable.
NOT Eligible Dependent Day Care FSA Expenses
- After school enrichment classes: Programs and lessons that are primarily for education or are skill-oriented are not reimbursable.
- Nursing home: Not reimbursable through a dependent day care FSA or a health care FSA.
- Educational expenses: Educational expenses for a child in Kindergarten or higher grades are not reimbursable. See Kindergarten tuition, Tuition.
- Overnight camp: Not eligible for reimbursement
- Diaper fee
- Meals, snacks and beverages
- Activity supply fees that are not related to care
- Field trips
- Enrichment classes
- Lessons (e.g., music, sports, education, etc.)
- Sick employee: Amounts paid to care for a dependent while the participant stays home from work due to the participant’s illness are not reimbursable.
- Volunteer work – expenses incurred to enable employee to volunteer: Not even if the volunteer work is for nominal pay