Everyone is familiar with the big names in pre-tax health benefits, HSA, HRA, and FSA. However, did you know that there are different types of FSAs? The Dependent Care FSA (DCFSA) can be offered alongside the standard medical FSA or as a stand-alone enhancement to help cover the eligible child or adult care expenses that are not covered or reimbursed by your other pre-tax accounts. You can use your DCFSA dollars on a wide variety of child and adult care services. Here are five ways to spend your dependent care funds that you may not have known about.
For busy parents, day camps are a great option. Camps that provide custodial care and have an open schedule may be eligible for reimbursement through the Dependent Care FSA. Parents and/or guardians are eligible for reimbursement if they provide custodial care for children 13 years old or younger. Day camps also include specialty camps such as sports or computers.
The Dependent Care FSA allows you to pay for in-home caregiver services through a babysitter, nanny, or au pair. This can include professional nannies, neighbors, and even family members. However, the person babysitting cannot be your spouse, someone under the age of 19, the parent of the qualified dependent (this only applies if your child is under 13 years of age), or a dependent claimed on either your or your spouse’s federal tax return.
When expenses or fees, like registration fees, are required in order to obtain care, they are reimbursable. Optional Fees are not reimbursable (i.e., lost deposit for changing providers without notice). These required care expenses, including registration fees, are only eligible for Dependent Care reimbursement after the services are received. Registration fees prior to services being received are ineligible. This can include registration fees, agency fees, application fees, deposits, and placement fees.
Before or After School Programs
Programs either before or after school are another way to spend your dependent care funds. These programs are a smart way to save money while taking care of loved ones so that you can continue to work or go to school. However, it’s good to keep in mind that educational expenses like tuition are not eligible for DCFSA.
Kinside is an employee benefit and child care marketplace that is creating new transparency into inventory and pricing at daycares, preschools, camps, and after-school programs. Currently available to over 4,000 employers, BRI partners with Kinside to help reduce the financial and tactical burden of child care on working parents by leveraging Dependent Care FSAs.
There are many ways to spend the funds in your account, and each option has its own set of benefits. Depending on your needs, one of these five options may be the right choice for you!