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Dependent Care FSA

Dependent Care Flexible Spending Account

The dependent care FSA allows full-time employees the opportunity to set aside money on a pre-tax basis to pay for the care of a dependent child or adult so that you and your spouse may work, attend school, or seek employment.  The "family maximum" that any family may set aside each year is $5,000; however, your personal limit under IRS rules may be less than $5,000.  As with the health care FSA, any amounts you set aside in your dependent care FSA that are left unclaimed in your account at the end of the year's "grace period" will be forfeited.  Unlike the health care FSA, dependent care FSA's are not "pre-funded", employees will only receive reimbursement for the amount deposited into the account as of the reimbursement date.  IRS regulations do NOT allow reimbursement for services that have not yet been provided, so even if you pay in advance for your expenses, you can only claim service periods that have already occurred (for example, if you are required to pay for all of January's child care expenses on January 1, you cannot claim the entire month's expense until February).  To be reimbursed you must submit a bill from a dependent care provider who has a tax ID number.

Please note, employees can generally exclude from gross income up to $5,000 of dependent care benefits provided under the College's dependent care assistance program each year ($2,500 for married employees filing separately).  Dependent care benefits include flexible spending deductions as well as employee discounts at the Dickinson College Children's Center.  Any benefits in excess of $5,000 are included in gross income (with applicable taxes withheld) on the final pay cycle  of the calendar year.

Examples of Allowable Dependent Care Expenses

  • Expenses you pay to someone to care for your dependent(s), either in or outside your home. Expenses for a day care center are allowed.
  • Expenses for a nursery school or day care center which provides lunch and educational facilities as part of a preschool child care service are eligible for reimbursement. Such expenses are not eligible for children in kindergarten or above.
  • Housekeepers who also cook and clean if the major portion of this service is for dependent care.

Examples of Non-Allowable Dependent Care Expenses

  • Costs for food, clothing, education, or entertainment for the qualifying dependent
  • Cost of transporting dependents to the care location
  • Expenses incurred before the employee is a participant in the plan
  • Expenses for schooling, unless a portion of the payment is for care of the dependent such as a boarding school
  • Child support payments
  • Babysitting fees to enable you to make doctor's visits
  • Babysitting fees to enable you to partake in non-work related social activities
  • Boarding school fees paid for healthy child while parent is recuperating from an illness.  Doctor's prescription is immaterial
  • Dance, swim, etc. lessons recommended by doctor for the general improvement of your health
  • Tuition and travel expenses to send a problem child to a particular school for a beneficial change in environment
  • Overnight camp.