Can I pay for child care before taxes?How much can I contribute?
Plan Options: Dependent Care Flexible Spending Account
A Dependent Care Flexible Spending account can be used to help offset your out-of-pocket child care expenses. This account allows you to pay child or dependent care on a pre-tax basis and can save you 10% – 30%, depending on your personal tax rate.
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Dependent Care Account |
What is a Dependent Care Flexible Spending Account?
A Dependent Care Flexible Spending Account offers you a significant tax savings opportunity. They allow you to pay for eligible dependent care expenses using pre-tax dollars. The Dependent Care FSA does not allow a rollover, so you need to use all the money you put into the account each year.
In order for dependent care services to be eligible, they must be for the care of a taxable dependent under the age of 13 who lives with you or for a taxable dependent who is incapable of caring for himself or herself. The care must be needed so that you and your spouse (if applicable) can go to work. Because of this, care must be given during normal working hours and cannot be provided by another of your dependents. As always, it is important to consult with your tax advisor to determine if participation in this benefit is to your advantage or if filing for your child care credit on your annual tax return may be more beneficial.
The maximum contributions amount is $5,000 per year, depending on your marital and tax-filing status.
