Dependent Care Flexible Spending Account (DCFSA)

What is a DCFSA?
Families often need support with child and elder care. A Dependent Care Flexible Spending Account (DCFSA) allows you to save on eligible care expenses using pre-tax dollars. You can use these funds for a wide range of dependent care services, including:

• Child daycare
• Senior daycare
• Babysitting services
• Before- and after-school programs
• Sick child care

Who Qualifies as a Dependent?
According to IRS guidelines, a qualifying dependent includes:

• Your qualifying child (dependent) under age 13 when care is provided
• Your spouse who is physically or mentally unable to care for themselves and lived with you for more than half the year
• An individual who:
  • Is physically or mentally unable to care for themselves
  • Lived with you for more than half the year
  • Is your dependent, or would qualify except for specific IRS limitations (such as income thresholds, filing status, or being claimed as a dependent on another return)

Can I Change My Contribution Amount During the Year?
DCFSA contributions generally cannot be changed during the plan year unless you experience a qualifying life event or a change in care costs or coverage. Eligible changes include:

• Change in marital status
• Birth, adoption, or death of a dependent
• Change in employment status
• Change in cost or coverage of care services

What If My Claim Exceeds My Account Balance?
If your claim is greater than your available balance:

• You will be reimbursed up to your current account balance
• The remaining amount will be processed once additional contributions are deposited into your account

Will I Have Access to My Full Annual Election at the Start of the Year?
No. Unlike a Healthcare FSA, DCFSA funds are only available as they are contributed through payroll deductions each pay period.

How Much Can I Contribute?

• Maximum annual contribution:
  • $5,000 (or $2,500 if married and filing separately)
• Your contribution cannot exceed earned income limits:
  • If single: your income
  • If married: the lesser of your income or your spouse’s income

What If I Don’t Use All My Funds?
DCFSA funds follow the “use it or lose it” rule:

• Funds must be used for eligible expenses within the plan year
• Unused funds are forfeited
• Funds cannot be refunded, transferred, or carried over

To avoid forfeiture, consider estimating your expenses conservatively when choosing your annual contribution.

When Is the Deadline for Reimbursement?
Expenses must be incurred within the same calendar year in which contributions are made. Any remaining balance at the end of the year is forfeited and cannot be carried over into the next year