What is a Dependent Care Flexible Spending Account (DCFSA)? A DCFSA is a pre-tax benefit account used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or elder daycare.

Who is eligible to use a DCFSA? Generally, you're eligible if you have a dependent under the age of 13, or a spouse or dependent of any age who is physically or mentally incapable of self-care and has the same principal place of abode as the taxpayer for more than half of the year.

What expenses are eligible for reimbursement from a DCFSA? Eligible expenses include costs for services like daycare, before and after school care, preschool, and summer day camp. Adult daycare for a dependent spouse or parent can also be covered.

How much can I contribute to a DCFSA? The maximum annual contribution limit is $5,000 for single or married filing jointly, or $2,500 for married filing separately.

How do I contribute to a DCFSA? Contributions are typically made through regular pre-tax payroll deductions, set up during your benefits enrollment period.

How do I use the funds in my DCFSA? After you incur eligible dependent care expenses, you can submit a claim to your DCFSA for reimbursement. Some plans provide a debit card for direct payment to the provider. DependentCares will connect directly with your care providers to access the information we need to process these claims on behalf of working parents.

What happens if I don't use all the funds in my DCFSA by the end of the year? DCFSA funds are "use it or lose it," meaning any unused funds at the end of the plan year (or grace period if your plan offers one) are forfeited.

Can I change my DCFSA contribution amount during the year? Generally, you can only change your contribution amount during your benefits enrollment period or if you experience a qualifying life event, such as marriage, birth of a child, or change in daycare provider. This includes any new summer care programs.

What are the tax benefits of using a DCFSA? The funds you contribute to a DCFSA are deducted from your earnings before taxes, reducing your taxable income. This can lead to significant tax savings.

Can I use a DCFSA if I also claim the Child and Dependent Care Tax Credit? Yes, but the same expenses can't be used for both benefits. The IRS has specific rules about this, so it's best to consult with a tax advisor.

Can I use a DCFSA for elder care expenses? Yes, if the elder is your tax dependent and is physically or mentally incapable of self-care.

How does a DCFSA work if my spouse and I are divorced or separated? Only the parent with primary custody can use a DCFSA, regardless of who incurs the expenses.

Can I use a DCFSA for expenses related to special needs care? Yes, if the services are necessary for you and your spouse to work, look for work, or attend school full-time. In many instances, this extends the eligibility to participate in these plans beyond age 13.

What happens to my DCFSA if I change jobs? Typically, you lose access to the funds unless you're eligible for and elect COBRA continuation. Any contributions already made can still be used for eligible expenses incurred while you were employed.

What is the process for submitting a claim for reimbursement from my DCFSA? DependentCares is the only DCFSA administrator that connects directly with Care Providers. We obtain the neccessary documentation on behalf of working parents and share the tax savings with these Care Providers - creating a new recurring revenue stream for these providers. 

What documentation do I need to provide when submitting a DCFSA claim? To satisfy the IRS, we need to provide a receipt or invoice that includes the date of service, the provider's name and address, the person who received the care, and the cost. With your authorization, we connect with your Care Providers to obtain the proper documentation on behalf of working parents.

How does a DCFSA work with other benefits like a Health Savings Account (HSA) or Flexible Spending Account (FSA)? A DCFSA is separate from an HSA or FSA and is specifically used for dependent care expenses. You can have a DCFSA in addition to an HSA or FSA.

What happens to my DCFSA if my dependent care needs change during the year? If you experience a significant change in your dependent care needs, such as a change in provider or cost, you may be able to adjust your DCFSA contributions. This would be considered a qualifying life event.

Can part-time employees use a DCFSA? Eligibility for part-time employees depends on the specific policies of the employer. Some employers may require a certain number of hours worked to be eligible for benefits.

How does DependentCares simplify the process of managing a DCFSA? DependentCares offers dynamic pricing, care provider integration, payroll integrations, and post-enrollment discrimination testing. This makes the process of managing a DCFSA simpler, more efficient, and more affordable for everyone involved.