Dependent Care FSA — DCFSA
A Dependent Care FSA is a job-based account that lets you set aside pre-tax money to pay for child care or care for an adult dependent.
Official source: irs.gov
A Dependent Care Flexible Spending Account (FSA) is a special account offered by some employers. It lets you put money aside from your paycheck before taxes are taken out. You can use this money to pay for care for certain family members.This account is for people who work and have children under age 13. It can also be for a spouse or other adult who cannot care for themselves. The child or adult must live with you and be claimed as a dependent on your taxes. This means the account helps families pay for things like daycare, preschool, or care for an elder who needs supervision while you work.Using a Dependent Care FSA can save you money. The money you put into the account is not taxed. This lowers how much you pay in taxes each year. It helps make child care or adult care more affordable for your family.To see if a Dependent Care FSA is right for you, check with your employer's human resources department. They can tell you if they offer this benefit and how to sign up. See also: <a href="/glossary/ccdf">CCDF</a>.
In real life
- Working parents put $5,000 in a Dependent Care FSA to pay for daycare.
- Sarah uses her Dependent Care FSA money to pay for her elderly mother's in-home care while Sarah is at work.
- David sets aside funds in his Dependent Care FSA to cover the costs of his son's after-school program.
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Frequently asked questions about Dependent Care FSA
What is Dependent Care FSA?+
A Dependent Care FSA is a job-based account that lets you set aside pre-tax money to pay for child care or care for an adult dependent.
Who qualifies for Dependent Care FSA?+
Low- to moderate-income families with children. Specific age, income, and work-status rules vary by program and state.
How do I apply for Dependent Care FSA?+
Apply through your state human services agency. BK's Find Benefits tool links you to your state's portal. Official forms and instructions: https://www.irs.gov/publications/p503.
Where can I get help?+
Use BenefitKarma's free Benefit Eligibility Screener to see which family programs you qualify for, or contact your state human services agency for child care, TANF, and Head Start applications.
Source: irs.gov