2022 Changes to Dependent Care
A Dependent Care Flexible Spending Account (often shortened to ‘Dependent Care FSA’) is a pre-tax benefit account used to pay for eligible services such as preschool, summer day camp, before/after school programs, and child or adult daycare. It’s a simple way to save money while taking care of your loved ones.
While there haven’t been a lot of changes with Dependent Care, the last few years have brought some important updates. The IRS allowed a temporary increase in the FSA plan maximum from $5,000 (single or married filing jointly) to $10,500 for the 2021 tax year with ARPA. Since the limit was temporary, as the IRS recently released the 2022 limits in which the limit was reduced back to $5,000.
Another temporary relief allowed some employers to enact provisions to carry unused funds from 2020 to 2021 and from 2021 to 2022 with the Consolidated Appropriations Act, 2021.
Who is Eligible?
In most cases you are eligible if you’re providing care to a qualified person and are:
- gainfully employed
- looking for work
If you’re married, the care must also allow your spouse to:
- look for work
- attend school full-time
How Do I Enroll?
You can enroll in, or renew, your enrollment through your employer during annual Open Enrollment.
Contact Benefit Resource to learn more .