Dependent Care Flexible Spending Account FAQs
Are you eligible to open a Dependent Care FSA? What are your savings options? Are your dependents’ healthcare expenses covered? Find answers to all your questions about your WageWorks® Dependent Care FSA.
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Families often need help with child and elder daycare. A Dependent Daycare Flexible Spending Account (FSA) lets you save on dependent daycare expenses using pre-tax dollars. You can spend your dependent daycare savings account funds on a wide range of care for eligible members of your family. Some of the expenses covered include senior daycare, child daycare, babysitting, before/after-school programs and sick child care
Dependent Care expenses must be incurred to enable you (and your spouse if married) to work or look for work. Work may include actively looking for work but does not include unpaid volunteer work, or volunteer work for a nominal salary. Your spouse is considered to have worked if he or she is a full-time student for at least five calendar months during the tax year, or if he or she is physically or mentally incapable of self-care.
Expenses you pay for Dependent Care while you are off work due to illness are not eligible for reimbursement.
WageWorks makes it as easy as possible to use your Dependent Care FSA. You can pay for eligible expenses in two ways:
If your claim amount is more than what you have in your Dependent Care account, WageWorks will reimburse you up to the amount that is in your account and hold the rest of your claim until your account is funded. At that time WageWorks will reimburse you for the rest of our claim.
No, you will only have access to Dependent Care funds that have been deducted from your pay check each pay period.
Your election may not exceed the maximum amount specified in Section 129 of the Internal Revenue Code. Currently, the maximum annual amount is $5,000 per year ($2,500 if you are married and file separate returns). Your maximum allocation may not exceed the earned income limitation. If you are single, the earned income limitation is your salary (excluding your contributions to the plan). If you are married, the earned income limitation is the lesser of your salary (excluding your contributions to the plan) or your spouse's salary.
If you are married and file a joint tax return, the maximum amount you may exclude is $5,000. In other words, you and your spouse may not each claim $5,000. The maximum amount available if you are married but filing separate returns is $2,500. Please note you may not "double-dip" expenses (e.g., expenses reimbursed under your Dependent Care FSA may not be reimbursed under your spouse's Dependent Care FSA and vice versa).
A qualifying individual is any of the following:
Learn more about qualifying dependents here
No. Fees associated with kindergarten as well as tuition for children in first grade and above are not eligible for reimbursement under a Dependent Care FSA. Expenses related to before and after school care or nursery school expenses are eligible if the care is primarily custodial in nature.
For a list of eligible Dependent Care expenses, please click here.
Your election is irrevocable for the plan year unless you have a change in status or other qualified event as defined in the IRS Regulations and your employer's plan permits such qualified changes.
Qualified changes in status include:
Your requested change must be consistent with a qualifying event. If you experience a change in status or other qualified event, please contact your HR representative to obtain the appropriate paperwork for completion.
All money contributed to a Dependent Care FSA must be used to reimburse qualified expenses incurred during that plan year. Money not used to reimburse eligible expenses is forfeited.
The unused portion of your Dependent Care FSA may not be paid to you in cash or other benefits, including transferring money between FSAs. To reduce the risk of forfeiture, it is critical for you to be conservative when choosing your annual election amount. Our online savings calculator can help you estimate your annual expenses.
You may not claim any other tax benefit for the tax-free amounts received by you under the Dependent Care FSA, although the balance of your eligible employment-related expenses may be eligible for the Dependent Care credit. Please consult your tax advisor to determine whether the tax credit may be more favorable to you than participating in the Dependent Care FSA.
You can pay many of your Dependent Care expenses directly from your FSA account, with no need to fill out paper forms or send in receipts. It's quick, easy, secure, and available online at any time.
To pay a provider:
If you do need to submit a receipt for reimbursement you have several options:
The grace period allows you additional time to spend the dollars that are in your FSA. Your employer must elect grace period in order for you to participate. To find out if your employer offers the grace period log into your account.