Dependent Daycare (FSA)

Benefits

The Dependent Day Care Flexible Spending Account (DCFSA) allows you to contribute $600 to $5,000 on a pre-tax basis to pay for eligible daycare expenses. Using the DCFSA reduces your taxable income. You can estimate your tax savings by completing the online tax worksheet available on the HealthEquity website.

Watch the pre-recorded DCFSA Webinar to learn more about saving tax dollars by utilizing the plan.

How to Qualify

To qualify for a DCFSA, dependent care must be essential for you and a spouse (if applicable) to work, look for work or attend school full-time.

Dependents must meet one of the following criteria:

  • Children under age 13
  • A spouse who is physically or mentally unable to care for him/herself
  • Any adult you can claim as a dependent on your tax return who is physically or mentally unable to care for him/herself

Private school and summer camp fees are not eligible for reimbursement. For more guidance about eligible and ineligible expenses, visit the HealthEquity education portal.

Care must be provided by an eligible caregiver, defined as:

  • A person for whom you can provide a Social Security number
  • A daycare facility with a taxpayer identification number

Children or stepchildren under age 19 and anyone you or your spouse claim as a dependent on your tax return are not eligible caregivers.

Eligible dependent daycare expenses must be paid out of pocket. You may submit a reimbursement request through HealthEquity’s member portal via myhealthequity.com or by using the DCFSA reimbursement form. Recurring DCFSA claims can be scheduled for the duration of the plan year.

Requests for reimbursement of claims incurred January 1 through December 31 must be submitted by March 31 of the following year. There is no grace period for the Dependent Care Reimbursement Account; therefore all expenses must be incurred by December 31 of the current year.

If Your Spouse Has a Similar Account

By law, the maximum amount you may contribute to a dependent daycare reimbursement account is $5,000 per household, whether or not your spouse contributes to a DCFSA at his/her company.

Receipts are Required for Reimbursement

  • Remember to save all receipts, which are required for reimbursement and validation of expenses
  • HealthEquity offers an easy-to-use Documentation Library that allows you to upload and store receipts within the member portal

Important DCFSA Considerations

Must Have Money Accrued for Reimbursement

Unlike the Health FSA, you must accrue money each payday in your DCFSA. Money is not advanced at the beginning of the year.

Use It or Lose It

A 45-day grace period has been added to the plan. Expenses must be incurred by March 15, 2022 and submitted by March 31, 2022. Any funds that are unused are NOT refundable to you. In other words, if you don’t use it, you lose it! Therefore, you should estimate your family’s daycare expenses carefully.

Calendar Year Lock-in

Once you have enrolled in the spending account, you cannot stop participating or change the amount you are contributing until the next enrollment period, unless you have a qualifying life event and request a consistent change within 31 days.

Need Help?

Contact the HR Connect Team at 1-877-562-8383.