What Is a Dependent Care FSA?

The dependent care FSA is a special type of account that is designed to help individuals pay for dependent care costs. Here are the basics of the dependent care FSA and how it works.

Dependent Care FSA

The term FSA stands for flexible spending account. The dependent care FSA is a type of flexible spending account that is offered by employers. This is a type of account that allows you to make tax-deductible contributions to it. You can use the funds in this account for a variety of different purposes. If you have a dependent that requires care, you can use the money from the account to pay for this expense. Essentially, you are using tax-advantaged funds to pay for dependent care.

Dependent Care

The term dependent care can mean a few different things. First of all, it will cover the cost of childcare for any children under the age of 13. However, it is not limited solely to childcare expenses. Many adults are also taking care of their elderly parents in today's society. If you are doing this and you have to pay someone to take care of them, this type of flexible spending account will allow you to pay for those costs as well.

Can I use a dependent care FSA for preschool?

If you have a dependent care FSA, you cannot use the money from it to pay for preschool. No education-related expenses are covered under this type of spending account. You can use the money for before school or after school care of any kind. However, when it comes to paying for preschool itself, you will not be able use the money. You can use the money to pay for transportation costs and to pay for a caregiver. You can use it for summer camps and for in-home care or daycare at a specific facility.

Does summer camp qualify as an FSA dependent care expense?

If you have an FSA dependent care account, you could potentially use the money to pay for summer camp. If you are sending your child to a summer day camp, then you can use the money from the FSA dependent care account for this. It is a qualified expense. However, if you are paying for an overnight summer camp, then this expense would not qualify. The important criteria is whether the child is spending the night at the camp. If a caregiver is providing transportation to this day camp, you can also pay for that expense with your FSA dependent care account.

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