Dependent Care Flexible Spending Account
Child and dependent care is a large expense for many American families. Millions of people rely on child care to work, while others are responsible for older parents or disabled family members. Participants in a Dependent Care Account can save on these expenses while they work.
What is a Dependent Care Flexible Spending Account?
A Dependent Care Flexible Spending Account is designed to provide financial support to parents who work full-time and must find care for a dependent child or adult while they are working. Participants can set aside pre-tax funds from their paycheck for eligible expenses.
DCA expenses require that expenditures be “work related” — those incurred while the member or their spouse were working or looking for work. A Dependent Care FSA plan will cover:
- Child and adult daycare
- Nanny and babysitting expenses
- Elderly care
- Summer day camp
- Before- and after-school care
The Internal Revenue Service (IRS) determines the maximum amounts members can contribute to their DCA Plan.