Qualified expenses—Child Daycare FSA

Check your Summary Plan Description for the benefit(s) available in your plan.

Child Dependent Care expenses that DO qualify for reimbursement

Only expenses necessary for you and your spouse (if married) to be gainfully employed can be claimed.

  • Nanny, babysitter, housekeeper, and nurse's fees through age 12, for services provided inside your home, are eligible to the extent they are attributable to dependent care expenses and expenses of incidental household services.
  • Dependent care expenses incurred for services outside your home, providing they are incurred for the care of a qualifying dependent that regularly spends at least 8 hours per day in your home.
  • Registration fees to a daycare facility are eligible as long as the fees are allocable to actual care and not described as materials or other fees.
  • Food and incidental expenses (diapers, activities, etc.) may be eligible if part of dependent care charge.
  • Before and after school care through age 12.
  • Pre-K or nursery school expenses are eligible, even if the school also furnishes lunch and educational services.
  • Day camp expenses through age 12 are eligible if the day camp's main purpose is the dependent child's well-being and protection.
  • Expenses paid to a relative (e.g. child, parent, or grandparent of participant) are eligible. However, the relative cannot be under age 19 or a tax dependent of the participant.
  • FICA and FUTA payroll taxes of the daycare provider are eligible.
  • Dependent care expenses incurred to enable the employee to find work are eligible.

Child Dependent Care expenses that DO NOT qualify for reimbursement

  • Kindergarten fees are almost always an education expense and should never be reimbursed under a dependent care plan.
  • Elementary school expenses for a child in first grade or higher are not eligible.
  • Overnight camp.
  • Food, transportation, and incidental expenses (diapers, activities, etc.) are not eligible if charged separately from dependent care expenses.
  • Expenses paid to a housekeeper, maid, cook, etc. are not eligible, except where incidental to child or dependent adult care.
  • Mass transit and parking.

Limitation on Qualified Expense

Child Dependent Care reimbursement may not exceed the smaller of the following limits:

  • The maximum allowed under the plan.
  • $5,000 (if you are married and filing a joint tax return or are single, head of household) and $2,500 if you are married and separate returns are filed.
  • Your taxable compensation (after all compensation reduction elections). If you are married, your spouse's actual or deemed earned income.
  • If you are married, your spouse's actual or deemed earned income.

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