Dependent Care Flexible Spending Account

Eligibility

All eligible employees with children under the age of 13 or have disabled dependents that are enrolled in daycare can elect a DCFSA. To be eligible for reimbursement, you and your spouse must be employed, actively searching for a job, or enrolled as a full-time student for at least 5 months of the year.

Contributing to a Dependent Care FSA

• When you enroll you choose how much money you want to contribute to your DCFSA account per IRS guidelines. Your contributions are deducted from your pay in equal installments throughout the year before taxes are withheld.
• You may contribute from $100 to $7,500 (family maximum) on a pre-tax basis to your DCFSA. How much you contribute depends on what you expect to pay an individual or facility to provide day care for your eligible dependents.
• You cannot change your annual contribution to your account after you make your election without a qualifying mid-year event or a change in dependent care costs. The funds in your account do not roll over annually, and any unused funds will be forfeited after a 2.5-month grace period.

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Important DCFSA Rules

Because DCFSAs are regulated by the IRS, there are some rules to remember.

• Eligibility for reimbursement. The care must enable you (and your spouse, if you are married) to work, look for work, or attend school full-time.
• Determine your contributions carefully. Once you’ve made your DCFSA election, you cannot change your contributions during the year unless you experience a qualifying life event or a change in dependent care costs. You have 30 days from the date of the qualifying event to change your DCFSA election.
• The grace period. IRS regulations provide for a 2½ month grace period for DCFSA only, which will allow you to file claims for expenses incurred through March 15, 2027.
• Use it or lose it. Be sure to estimate your expenses and DCFSA contributions carefully. IRS rules prohibit the return of any unused funds. However, you have until March 31, 2027, to request reimbursement from Optum Bank.
• No double-dipping. You can only claim eligible expenses once — either for reimbursement from your DCFSA or as a tax credit on your federal income tax return.

IRS Publication 503 (“Child and Dependent Care Expenses”) contains a detailed explanation of eligible and ineligible dependent care expenses and is available online at IRS.gov or by calling 800-829-FORM (3676).