Daycare for your children under age 13 or for other qualified dependents (such as a dependent parent or disabled spouse) can be paid from this account if you can claim a deduction for the individual on your federal income tax return.
You may claim reimbursement for the expenses of your family members (other than a domestic partner) even if they're not covered by the employer-sponsored health care benefits. Generally, you may use your Dependent Care (Daycare) Flexible Spending Account to pay daycare expenses that make it possible for you to work. Dependent care expenses must satisfy the following criteria to be eligible for reimbursement from your account:
- If married, both you and your spouse must work (unless your spouse is a full-time student or is disabled). The annual amount submitted for reimbursement cannot exceed the earned income of the lower-paid spouse. A spouse who is a full-time student for at least five months during the year or is incapable of self-care for one or more months is considered to earn $200 per month if you have one qualifying dependent receiving care or $400 per month if you have two or more dependents receiving care.
- Expenses must be for the care of a dependent who is under age 13 or physically or mentally incapable of caring for him- or herself.
- Expenses must be for the well-being and protection of a dependent so that you (and your spouse, if married) can work. Expenses for services necessary to run the home by a housekeeper or maid are covered if they are partly for the well-being and protection of a dependent. Expenses for a dependent's food, clothing, education, or entertainment are not covered.
- Services for a dependent under age 13 may be provided by a babysitter or daycare center. If the daycare center is a dependent care center the expenses will not qualify unless the center complies with all applicable laws and regulations. (A "dependent care center" means a facility which provides care for more than six persons [other than those who reside at the facility] and receives a payment or grant for providing these services [regardless of whether the facility is operating for profit].)
- If the services are provided outside your home for a disabled spouse or other dependent age 13 or older, the disabled spouse or person must spend at least eight hours each day in your home.
- You must have made payments for child and dependent care to someone you could not claim as a dependent and, if the person you made payments to was your child, he or she must have been age 19 or over by year-end.
- Expenses reimbursed from your flexible spending account cannot be claimed as a tax credit on your federal income tax return.
Resources
- Check Navia's List of Eligible & Ineligible Expenses for common dependent (daycare) care expenses.
- Internal Revenue Service Publication 503, Child and Dependent Care Expenses, provides examples of the amounts and types of expenses eligible for reimbursement through your flexible spending account. Download IRS forms and publications, or call 800.TAX.FORM (800.829.3676).
