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2018 Day Care Flexible Spending Account (FSA)

A Day Care FSA is a great way to save money on dependent care. You can set aside pre-tax money to pay for day care for your child who is under the age of 13 or for a spouse or dependent age 13 or over who is not able to take care of him/herself. The day care expenses must be necessary for you to work. If you are married, the expenses must be necessary for your spouse to either work or attend school full-time.

A Day Care FSA allows you to use tax-free money to pay for the following types of expenses:

  • Before and after school programs
  • Day care (child and adult)
  • Nursery school or preschool
  • Summer day camp
  • Certain other dependent care expenses needed while you and your spouse work or your spouse goes to school full-time (See the summary plan description found on the HR homepage on DomNet at the office or DomNet via VPN for more information. You’ll need to be at work or connected via VPN to access DomNet.)

Quick Tip

To view a detailed listing of eligible expenses, log into www.payflex.com.

Day Care FSA Contribution Amounts

  • Minimum contribution: $120 per year
  • Maximum contribution: up to $5,000 per year, depending on your tax status
Based on your tax status… You can set aside…
If single or married filing jointly Up to $5,000
If married filing jointly and your spouse’s employer offers a dependent care account Up to $5,000 in total to the two accounts
If your spouse earns less than $5,000 per year Up to the amount of your spouse’s earned income
If married filing separate returns Up to $2,500

Grace Period to Incur Expenses

Use all the funds in your account by March 15 of the following year, which includes the grace period. Claims incurred through the grace period and postmarked by April 30 can be processed for reimbursement using the previous plan year’s FSA balance.

For example, if after December 31, 2018 you have funds remaining in your 2018 Day Care (and Healthcare) FSA, you can incur expenses until March 15, 2019.

Day Care FSA or Tax Credit?

Which one will work best for you—the Day Care FSA or the federal dependent care tax credit? Remember, you can’t take the tax credit for any amounts that are reimbursed through the Day Care FSA. In some cases, the tax credit may provide more savings than an FSA.

Day Care FSA Dependent Care Tax Credit
You decide in advance how much to set aside for the coming year. You wait until filing your tax return to claim the credit for any dependent care costs.

For more information, consult a tax advisor.

Tools That Help You Estimate Expenses

Visit Your Benefits Resources™ for tools and calculators to help you determine how much you should contribute to a Day Care FSA for the year.