Dependent Day Care Flexible Spending Account (FSA)

by David Ning · 93 comments

dependent day care flexible spending account
For the first time ever, a company that my wife or I worked for offered flexible spending accounts (FSA).  We were given two accounts to enroll in: Dependent Day Care FSA nad Health Care FSA.  I will be looking into each of these in more detail.  Today, let’s focus on:

Dependent Day Care Flexible Spending Account

In our society where dual income families are the norm, day care is almost a must for any young families. I’ve heard that people could spend $1000 or more a month on day care, so if we can use pre-tax dollars to pay for this, it would help the family budget significantly.

Another important point to note is that while the most common use of this type of FSA is for child care, elderly care is also considered under this plan.  Adult day care and even nursing homes for parents that don’t live with you are all eligible expenses.

Check list for Determining If Your Dependent Care Expenses Qualify
The government has set some rules for eligibility in order to prevent abuse. Check below to make sure all the criteria are met before you apply.

  • Both you and your spouse must have earned income, unless the person without income is a full-time student or is incapable (physcially or mentally) of self-care
  • The day care center must enable you two to work, look for a job., or attend school full-time.
  • You and your spouse must be paying at least half household expenses that you two reside in.
  • The reimbursed amount must be lower than either you or your spouse’s earned income
  • You cannot be using the funds to pay for care by your dependent, or for that matter anyone under the age of 19
  • The day care center you choose must be licensed if they care for more than 6 children

A Couple Look Out Regarding Day Care FSAs
Even though the maximum you can contribute to this type of FSA is $5,000, your employer has the option of setting a lower maximum contribution so remember to find out.  Also be careful when filling out the forms because some forms asks you for the full annual contribution amount while others asks for the per paycheck deduction amount.

Remember that with FSAs, you have to estimate how much you will need for the whole year in advance and you lose what you don’t use.  Therefore, careful planning is crucial or else you will end up losing money instead of benefiting from this plan.

Last year’s records are a great place to start when planning for the upcoming year’s expenses.  If your expenses largely revolve around a day care facility, speak to them about the upcoming year and whether there will be fee changes.

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{ 93 comments… read them below or add one }

Mary@SimplyForties November 30, 2008 at 9:03 am

I no longer have children in daycare but this is an excellent article. I was unaware that daycare FSA’s existed. I’ll be sending this along to families I know who do have children in daycare. Thanks.

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Polly Poorhouse December 5, 2008 at 11:09 am

Great and timely article. I have one quibble though, as I recently looked into this. According to the IRS documents, expenses for caregivers under 19 are eligible, provided they are not related to you. This is important for people who may use teenage after-school babysitters.

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margaret December 29, 2008 at 8:03 am

is there a list of day care centers that accept this flexible daycare account. I have twins, I was so excited that I took out the max of $5000. the way my company does it, is they give you a card, it look live a visa card, but the provider has to accept it. I have yet to find a center and I have called all in malden, ma

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Julie November 21, 2012 at 12:19 pm

While they give you a debit card, you do not need to use it. You can also submit a receipt for reimbursement. That’s what I do. They do require the receipt have certain information on it, but as long as you have a receipt with the applicable information you do not need to use the debit card.

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Julie November 21, 2012 at 12:20 pm

So to clarify, we pay by check and then submit our receipt for reimbursement.

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MoneyNing December 29, 2008 at 8:20 am

margaret: If it’s those debit visa cards, they are supposed to accept it as long as they accept debit cards. Check to see if that card has a credit option, which opens even more ways to pay.

I would actually check with your plan provider and see if there is a way to also manually submit your expenses. That way, as long as you have proof of your expenses, you can get a refund.

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zack March 27, 2009 at 7:56 am

My daycare provider does not accept cards. So I get a receipt and fill out a claim form. The account provider should provide you with the reimbursement form. I get mine from my company’s web site.

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afunbee July 23, 2009 at 4:27 pm

I signed up in the beginning of the year so that my wife can look for a job and child can go to day care part-time. Wife was unable to find job and I would like to stop sending child to day care since wife is at home more. Can I change my enrollment in the mid-year due to this reason?

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MoneyNing July 24, 2009 at 9:09 am

It all depends on your employer so talk to your HR (or plan administrator). Usually, they have a specific time that you can make changes to your FSA plans. (It’s probably once a year but it may be more frequent for your company)

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michele March 27, 2012 at 6:54 am

HELP!! I am in a FSA for dependent care, and have not used the daycare for a month. My company is telling me that I cannot get that money back, and I even have to keep contributing out of my own paycheck to the FSA for three more months. Is there any way I can get that money back? It feels like the compay is stealing from me !!! :(

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Diana August 22, 2009 at 12:02 pm

We take out $5000 dependent day care FSA. This year my husband’s employer is saying that they’re reducing it to $1800. How can they do this and more importantly why can they do this? Can someone please explain? Thanks.

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MoneyNing August 22, 2009 at 3:26 pm

In general, the federal cap is at $5,000. Also, both you and your husband are supposed to have income in order to take advantage of dependent day care FSAs. Have you asked your husband’s employer why they are reducing this? For example, if one spouse (in that case, you) earns less than $5,000 then the benefit is limited to whatever that spouse earned.

Does this apply? If not, the easiest way to get an accurate explanation is to just ask your husband’s employer.

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nathan November 13, 2012 at 9:30 am

My employer also reduced it to 1,800 this year. Why would they do this, what advantage is there to the employeer by doing this? Do they have out of pocket expenses to offer this? I thought it was stricly between the employee and the IRS.

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Heidi September 17, 2009 at 3:00 pm

I’m a stay at home mom who is about to be put on bedrest for the last few months of pregnany. Can we use this FSA account to hire a nanny for our 4 year old, since I will not longer be able to care for him and my husband works full time and travels with his job. Please advise.

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Cindy March 16, 2010 at 12:38 pm

How about putting your 4 year old in preschool. Your child would benefit from the social interaction along with exposure to early academic curriculum. Check with your local schools to see if they have a free preschool program. It’s free through most public school systems.

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Sandra July 27, 2010 at 4:08 pm

I have sign up for a $5000 FSA for Dependent Care in 2010. My husband lost his job in May so we decided we wouldn’t use all the $5000 in after school care/day camp throughout the 2010 year. With no advanced clarifications form the claim processing about the consequences of the procedure or any written documents available to the employees, my company accepted my cancellation of the FSA contribution as of June 1st. I had $2667 in deposits into my FSA dependent care account until May 31st but now my company says that I can’t claim any expenses incurred after May 31st. That means my company is keeping $1850 from my FSA deposits that I was hoping to use to pay day camp thru the summer vacation from school. My husband could/can not look for work this summer because he has to take care of two school age children… otherwise we will incurre in new expenses/not covered expenses in child care. Please advise….

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MoneyNing July 27, 2010 at 9:24 pm

As far as I know, pretty much all plans through employers are deducted from your paycheck. So for example, if you elected to contribute $5,000 a year and have 26 paychecks a year, then they deduct roughly $192 per paycheck from you to make it up. If you husband’s employment was until May, you technically only paid 5/12 out of the whole $5,000 (or roughly $2083). During May, you could have used up all $5,000 and got some free money, but in a way you would have been taking advantage of the system.

Since your husband lost work, I think COBRA lets you continue your FSA by making contributions though, so you might want to look there. If you don’t have the documents with you anymore, you may want to try calling them to see if you can still contribute.

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Allie February 24, 2014 at 6:12 pm

In case anyone sees this later, dependent care FSA does not allow you to be reimbursed for more than you contributed. i.e., no “free money”. That’s only for the health care FSA.

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Kevin August 6, 2010 at 11:23 am

My question is about the $5,000/yr maximum expense limit. My wife and I both work, file our taxes married jointly, and our current day care expenses is well over $5000 a year. Can my wife and I each contribute $5,000 pre-tax into our own separate DCA accounts and use the $10,000 total amount for our day care expenses? Or is the $5,000 cap per family?

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MoneyNing August 6, 2010 at 12:06 pm

You and your wife can both elect to have money deducted from your paycheck, but at tax time, all expenses above $5,000 will be taxed so in reality, the limit is $5,000 for the whole family.

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Jennifer November 9, 2010 at 8:38 am

I’m in the same boat, with daycare for 2 kids well exceeding the $5,000 pre-tax limit. I will vote for the politician who ups that to $10,000.

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Diana December 13, 2010 at 1:21 pm

I don’t quite understand this comment. Expenses aren’t taxed….net income is (after deducting allowable expenses). So I don’t understand what the comment “all expenses above $5,000 will be taxed” means. Can you please explain this a little further? Thanks.

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Allie February 24, 2014 at 6:18 pm

Here’s an explanation: Let’s say you and your wife earn combined income of $100,000. You contribute $5000 to your dependent care FSA, and your wife contributes $5000 to her dependent care FSA. But come tax time, you will pay taxes on $95,000 of income, not $90,000. The IRS won’t let you sneak by over the limit.

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Jessica August 26, 2010 at 11:12 am

I am starting a new job in September and they offer an FSA for child care. My son was in a licensed daycare for 3 months in the begining of 2010 but he has been at home with my husband (husband now works from home) since then. Can I contribute to my FSA from September til December 31, 2010 and use that money for our previous daycare expenses in the begining of 2010??

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Allie February 24, 2014 at 6:19 pm

No. You can only claim expenses that were incurred after you started your new job.

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Sandra August 27, 2010 at 8:47 am

JESSICA, dont’ fall in the trap. You can’t use the money to pay for the services you have receive before you enroll in the program. The timing is exact. For example: If you contributed September 1st, 2010 to December 31st, 2010, you have to spend that money between September 2010 and December 2010. The program won’t cover any expenses before or after that period. PERIOD.

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Jim September 7, 2010 at 7:39 pm

How can I get my FSA money (for daycare) back?
My company had a plan which ended 31st of March, 2010. The new plan starts April 1st, 2010. Should the FSA managing company be responsible for warning their clients for the expiration of 90 days period? Both FSA managing company and my company HR now said the money I put in my previous plan(Jan – March of 2010) can not be claimed. I am sitting here helplessly with my few thousands of dollars.
Can anyone have any idea what should I do next?

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Pawan September 8, 2010 at 12:35 pm

This is my situation. I’ve been contributing to my FSA Child Care throughout 2010. But my son hasn’t attended daycare since my wife has been unemployed since Nov 2009, and we decided to keep him home until she lands a job. That hasn’t happened yet, and frankly, I’m not betting on it. So, what happens to my contributions? Should I put him in daycare and use up the money? But then technically we don’t even qualify if she doesn’t work, right? Is there a way to get it back?

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Sandra September 8, 2010 at 2:11 pm

If you don’t use the money you loose it. IRS rule on this issue. Just happenned to me. Lost it. All of it. Look for advise from your HR people.

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Stephanie November 8, 2010 at 10:11 am

Hey
Since your wife lost her job, its consider a qualifying event, and you are able to cancel your contribuations. Just rememeber, once you cancel you will not be able to get that money, (unless you have daycare cost your trying to be reimbursted, prior to or up to the date you cancel your plan.)

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Pawan November 9, 2010 at 7:17 am

That’s what I was told by my HR too. I had given up. But luckily, my wife started working again. And it looks like my kids will be in daycare just long enough to use up our 2010 FSA fund.

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Sandra September 8, 2010 at 2:12 pm

ASAP

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Stephanie September 10, 2010 at 9:23 am

OK, My husband lost his job at the beginning of the year and I will not be able to retrieve my entire $5000 from FSA (Dependant Care). I will never contribute to a FSA again because this is absolutely unfair. I think of course I should pay the taxes on the money but the GOV’t should not keep the entire amount. So many people are out of work and are probably in the same situation. I sure they will give it to the banks for another round of bonuses

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Julie October 25, 2010 at 12:41 pm

Just an idea why not have the out of work spouse sign up for a class in school and then put the child in daycare to use up the monies. Just an idea.

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Brian October 3, 2013 at 6:58 am

I’m not an expert but I believe you must be a full-time student, not just taking “a class”

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Victoria September 10, 2010 at 7:09 pm

I am planning to enroll in an FSA during open enrollment in October. I am going to put $5,000 in, as I pay about $20,000 per year for child care. Am I still able to claim child care on my federal tax return? And if so, the whole amount, or just the amount over the $5,000?

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Julie October 25, 2010 at 12:44 pm

I want to know the answer to this as well. This year i have a full year of daycare and will go over my $5000. I was told by a non tax person i could claim anything over the $5000 but want to confirm with an expert just not sure who to contact.

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Vipul September 28, 2010 at 11:57 am

Hi,
I am switching employers in October and I accidentally elected the entire $5000 for the rest of the year thinking it would be pro-rated. So I have already used and claimed $2500 with my existing employer and now my new employer will deduct $5000 of which I can only avail $2500 (last 3 month daycare expense). Will I lose the remaining $2500 or does that now show as income since its more than the IRS allowed $5000 cap?

Thanks.

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MoneyNing September 28, 2010 at 12:48 pm

You need to get this changed because having more than $5000 is not allowed. I would contact the HR department (or the person who handles your account) to see what can be done.

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Vipul September 28, 2010 at 1:08 pm

I reached out to them and they have denied my appeal. What other options do I have at the end of the year when time comes to file taxes?

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Vipul September 28, 2010 at 1:08 pm

I reached out to them and they have denied my appeal. What other options do I have at the end of the year when time comes to file taxes?

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Roscoe October 6, 2010 at 8:12 am

I have a similar case. My current employer removed 5,000 in the second half of 2009 although I claimed 5k already for the first half of 2009.
What/where are the rules/legal infringement/liability for nominating the amount to be removed between the employee and employer?

thanks

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Lucys October 21, 2010 at 8:01 am

I was terminated in May, 2010. Enrolled in the flexible spending for dependent care and they have deducted out of my check approximately $1,999.98. I went to file a claim to get reimbursed for the funds deducted and was informed I only had 60 days to submit these claims. I did not receive any notice from the employer about this. Do I have any rights to dispute? If so can you point me in the right direction.

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Mike B July 27, 2011 at 10:37 am

Did you ever get a resolution on this? I just found myself in the same situation.

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Sharan February 6, 2012 at 10:38 am

Somewhat similar situation but in my case I continued the FSA with a new employer for the balance of the money. Now the new employer says expense was incurred prior to joining and hence cannot be reimbursed. Any advise?

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raj November 2, 2010 at 2:58 pm

What kind of question I should ask my child’s school whether or not they accepts fsa kids. He been going to this school almost 6 months now.
Thanks

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David February 2, 2011 at 9:18 am

Is this school a “school” that has a curriculum/charges tuition or is it a “child care” center? If the former, the tuition expenses are not eligible. You can however claim for “after school” day care.

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hamza November 14, 2010 at 4:06 pm

I enrolled in dependent care fsa for 2010 ($2500), not realizing that my wife needs to earn income for us to be reimbursed. She works as a teacher, but is currently on a leave of absence to take care of our one year old child. Is there anything I can do to recoup the $2500, or do i have to forfeit the money?

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steve November 15, 2010 at 10:12 am

2009 I contributed $5,000 to the FSA and spent more than $10,000 on my daughter’s daycare (paid check to daycare). But unfortunately fogot to file the reimbursement form with the copies of daycare cost receipts by Dec. 31, 2009. That means I lost all $5,000?

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David February 2, 2011 at 9:11 am

You had time till March 31, 2010.

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J April 17, 2013 at 8:29 am

Did you ever get this resolved? As a new employee, I did not know about the extension and was 2 days past the deadline in filing my claim (all expenses were valid in the claim itself). I’m trying to understand my chances of getting this money reimbursed.

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Joe November 23, 2010 at 11:45 am

That $5000 cap hasn’t been adjusted for cost of living in decades. The wife and I have two kids and daycare exceeds $20K/year. We really can’t afford that and neither can we afford a single income. Since the cap is per household, would it be best to get divorced, (ex)-wife live at ‘apt B’ and I live at ‘apt A’ so we could both make a $5K claim for each child? Or would it be best to have the wife open up a daycare center at home. I pay her the $5K I can withhold and then at tax time claim a major loss with the failing ‘daycare’ business? Just need to hold our breath for two years or so until the oldest is in school.

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Leo December 10, 2010 at 2:13 pm

My wife and I separated this April. I have agreed to pay all daycare and medical expenses for our 3 year-old daughter. We have joint legal custody but my wife is the custodial parent and my daighter lives with her over 60% of the time. I read that the dependant has to live with you in order for you to be eligible to use the FSA. Is this true in all cases or are there special circumstances? I will be paying my daughters daycare expenses next year and it sucks if I cannot use an FSA anymore. I really liked getting the reimbursements back since they almost seemed like bonuses “(Out of sight-Out of mind)”.

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Leo December 13, 2010 at 1:43 pm

Nevermind. Called the IRS for the answer. Can’t use the FSA next year and this year, I still have to file a Joint Married tax return with the Ex-Wife since I did the entire $5000.00. Sometimes I wish I could know just a little bit of what the future holds.

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Leah December 31, 2010 at 6:16 pm

The cost of day care for my child far exceeds the $5,000 limit on the DCFSA. Can I claim the $3,000 tax credit for the costs that go above and beyond the $5,000 from the FSA?

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beth January 7, 2011 at 2:25 pm

You have to pick a credit either you take the 3000 child tax credit or you do Flex spending not both. When I signed up for FSA they had a chart with a breakdown based on your income about when you should use the FSA versus the dependent care credit.

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Janie Wigley December 4, 2011 at 9:14 pm

My infant grandson is in daycare. His parents aren’t happy with the daycare and would prefer that I be his nanny in their home. Can my grandson’s mother’s FSA be used to pay me to care for my grandson if they remove him from the daycare center?

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MoneyNing December 5, 2011 at 9:39 am

I’m not a tax professional so you should discuss this with one but as I understand the current rules, money in the FSA can be paid to you as long as you aren’t claimed as a dependent on your children’s tax returns and your care is going to allow them to work (or look for work). You should also make sure that you report all income as it’s technically income so depending on your situation, it might not really be much of a benefit financially.

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Christine January 3, 2012 at 4:15 pm

My situation is as follow. I have started a new consulting business, so no income yet. Of course, I do want to make money and generate income in 2012 but no way to predict how this will all pen out. Does DCFSA penalize startup owners? I red it’s available for people looking full-time for a job, but what about people actually trying to create a living for themselves/starting a new business? And then, it said that you have to earn at least $5000/yr in order to claim DCFSA… so how would you be able to do this while looking 100% for a job (or developing a new venture)? Please help, I am confused!

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Arv March 14, 2012 at 12:27 am

I had enrolled in Daycare FSA last year (2011) for plan year from July 2011 to Jun 2012. But my wife could not get any income last year hence not going to file tax. However she started her work from Jan 1, 2012.

What would be my case:
1. IRS says that we need to file return jointly, but not possible in my case. How to file tax with informing IRS about my true concern?
2. What is tax liability on me? My W2 show $2500 as a FSA contribution for this calendar year.
3. Should I claim amount from FSA deposit for my kid’s day care expenses?
4. If yes, Can I claim for this year (2011)?
5. My wife is working this year and plan year is valid till Jun 2012. Can I claim all ($5000) amount this year if I am not eligible to claim last year (2011).

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James March 26, 2012 at 12:30 pm

I lost my job on Feb 10, 2012 and have $540 in flex spending/daycare expense. The year was to run from June 1, 2011 thru May 31, 2012. I have claims denied from Feb 6-12 and Feb 13-19 yet money was contributed on Feb 17. What can I do?

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Candy April 6, 2012 at 10:59 pm

On 2010, I enrolled the FSA account for $1500. However I was on owcp, so my employer couldn’t deduct any from my paycheck. I have $0 balance on all my paychecks. I called the FSA during the end of 2010. They said I could get any service because that is $0 amount on my account. Then, recently my employer are asking me to pay back $1500.00 out of my own pocket. The question is “Why do I have to pay $1500 to them, and instead I could claim this money back.

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Sad Tom May 7, 2012 at 2:23 pm

I signed up for Dependent Care FSA without knowing my wife had to work too. She is a stay-at home mom, but we enrolled our son in pre-school for the socialization, the kindergarden prep and to give her a little time off.

Is there any way to cancel the FSA, transfer it to my medical one or to get my money back?

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Benny May 16, 2012 at 11:03 am

I contributed $5,000 for the dependent care expense. I have not got any letter to remind the claim period from my employer.
In April, 2012 while I am preparing a tax return, I realized that I need to claim it by Dec. 31st, 2011.
Although I appealed to HR, it was denied. I have the second chance (and the last ) to appeal in writing. Any of you have advice how to write a reasonable appeal letter? Otherwise, I am going to lose all my money, which is essential for my kids.

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MoneyNing May 16, 2012 at 7:36 pm

I’m not sure there is a way, because it’s written pretty clearly in the IRS code that you forfeit unused contributions. You should definitely try to get the money back, but as I understand the rules, your employer or the company that handles the FSA account doesn’t have the authority to give you back the money.

The only way to get it back is if you are a qualified reservist, which only might apply if you were in military service during last year. If this is remotely applicable, I would search for The HEART Act (Public Law No. 110-245).

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Vidya September 15, 2012 at 3:34 pm

I have started working since September, 2012 and my employer offers a Dependent Care FSA. I have my twin sons in after-school care at a Montessori school and the expenses will amount to roughly $3500 through Dec. 31, 2012. I can either choose a per paycheck contribution or the annual limit while signing up for election. Can I choose to contribute the entire $3500/7 paychecks = $500 per paycheck so I can withdraw that amount at the end of the year or should the contribution only be
$5000/26 paychecks = $192 * 7 paychecks(I will get only 7 paychecks this year) = $1344, even though my eligible expenses will amount to $3500?
So, my question is, is there a limit of only $192 per paycheck or can I adjust it to $500, so I can pay for the $3500 in eligible expenses?

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MoneyNing September 15, 2012 at 4:10 pm

Most companies won’t let you adjust your per paycheck contribution whenever you want so you’d have to check with HR about the exact details, but you should really try to get to $3500 per year without going over as you won’t be able to get your money back if you “over contribute” for the year.

You should talk to HR as to the best way to go about it, but if you try to contribute up to $3500 with 7 paychecks, just make sure you don’t contribute too much for 2013.

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Adrienne December 5, 2012 at 5:05 pm

Sorry to find this thread so late, but I also have a question: if I hire an in-home nanny (or take my daughter to a nanny at someone else’s home, i.e. a “nanny share”), can I use my dependent FSA contributions to reimburse myself for the care the nanny provides? I’m just curious how it works for informal caregivers versus a licensed daycare which presumably is used to processing these kinds of things. If I fill out a claim form with the nanny’s information and submit to my FSA administrator, will it be accepted?

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MoneyNing December 6, 2012 at 12:25 pm

I’d think they need to be licensed and can/will provide a receipt for their services performed but why don’t you check with the FSA administrator? I’m sure they’ve dealt with this question before and can give more details about how THEY would like to handle it.

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Miss Lead January 26, 2013 at 8:53 pm

Thanks for writing this article and allowing all the comments! I am in a situation right now where we might be switching day care providers for my son. It depends on whether or not we will lose the money in the dependent care FSA. I did not know we would be considering this when I requested nearly $5000 for this year. If we switch, we will no longer need the money withdrawn from my paychecks.
The insurance company told me that I can request to have only dependent care fsa funds (NOT health fsa) stopped at any point due to change of status. I asked someone in HR and they said, no, this isn’t possible–some employers allow it, but my work doesn’t allow it. I called insurance company again and explained the information I had been told by both parties. This different person told me again, that yes, it is a federal law that exists that allows employees to request to have their dependent care funds stopped, regardless of where they are employed. HR has been known to not follow rules in hopes that we employees do not know the wiser.
I am trying to find where this law or clause exists, but have not been able to do so yet. Does anyone know what the code is if this does indeed exist? I would like to go back to HR with some concrete evidence. Thanks!

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Kevin February 21, 2013 at 4:21 pm

I contributed to DCA starting in June 2012. Can I ask for reimbursements using receipts for daycare expenses in January through May 2012?

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MoneyNing February 22, 2013 at 9:24 am

You should ask the company handling your DCA, since their rules may ultimately decide whether this is allowed or not.

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Dave March 1, 2013 at 10:39 am

I’m looking into signing up for a DCFSA for my sons day care expenses; however. my wife is not allowed to work in the US due to the immigration visa that she is one. Would the fact that she is not permitted to work exempt our family from the rule that both parents have to have income?

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bill April 19, 2013 at 10:16 am

I had put in $5000 in the dependent daycare account last year and I submitted my claim on 04/17. But, the claim was denied based on the last date of submission is 03/31. I kind of assumed that the last date for submission is 04/30 as it was with my previous employer and submitted it late. I know I made a mistake, but is there way I would be able to get this money back? It makes me hate myself to loose that kind of money. I have already called the administrator and requested, but no success.

Will my employer be able to do anything?

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Jasmine April 7, 2014 at 4:06 pm

Hi Bill, I know that you have posted this last year but did you happen to find a solution? I found I am in the same situation this year. Forgot to claim $5000 by 3/31. Is there a way I will be able to get this money back?

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Frank April 22, 2013 at 7:18 am

I am already contributing $5,000 into my FSA but my wife’s company will give her $700 for free and I can’t decrease mine at this time (non over lapping open enrollments). If we use all of $5,000 in my account and my wife’s $700 we will be over the federal limit of $5,000. Will we just have to pay taxes on the $700 or will there also be a penalty and if so how much will that penalty be?

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Jason May 31, 2013 at 10:13 pm

I signed up to contribute 5k during open enrollment, shortly after the new year my wife lost her job and was out of work for 5 months. She now makes significantly less than she once did and we’re struggling. The problem we have is we need to send our son to Summer day camps but can’t afford to pay in advance and have to wait to be reimbursed.
Is there some sort of way around this? I have money I can’t use because I’m too broke to use it…
Help

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Lissette June 7, 2013 at 12:41 pm

I put $2000 in the dependent daycare account this year and submitted a claim on May 30, 2013, which was denied by the insurance company. They mentioned that the unfortunately, under IRS regulations for a DCFSA, only expenses for a dependent under age 13 or that is disabled are eligible for reimbursement. However, my daughter is not old enough to stay my herself leaving me no choice but to have her in after-school program.

Is there any way I can dispite this claim with my insurance?

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Kellie August 27, 2013 at 12:23 pm

I was told by my employer that dependent care is “money in money out” regarding ONLY being able to be reimbursed for Dependent Care FSA, but my Healthcare FSA is fully funded with my contribution amount of $1,000 and I have $1,500 in my DCFSA. The reason being they (my employer ) is that the care must first be received. I don’t understand if I pay $500 a month for daycare that I can only get the amount of my contribution back as a reimbursement, but I can submit an “estimate” of costs for orthodontics care before the services are even rendered and receive the full amount of the estimate of cost if I have that amount left in my health care FSA account. I am trying to find the IRS rules that explain why and I can’t.

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Tiffany September 8, 2013 at 2:02 pm

My husband quit his job recently. We had been having the max of $191 per check taken out. The day he was officially termed from the system, I requested reimbursement for as much as I could – and received it. Then, the next two paychecks he got, he was still deducted the $191. Although he is no longer employed, can I still be reimbursed for the money I spent on daycare while he was employed?

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MoneyNing December 5, 2013 at 4:42 pm

Best to contact the company handling the FSA to see what the rules are.

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Kareem December 5, 2013 at 3:53 pm

My daughter will turn 4 in December 2014. She is enrolled in a private school that accepts preschoolers to 5th grade. We pay the tuition which is way more than $5K and after school day care ($130/month).
I contributed $5000 this year (2013) and I am getting reimbursed. But my question is for next year (2014):
Can I contribute the $5,000 maximum and claim them at the end of 2014?
At what age I can no longer claim tuition and only claim after school daycare?
Thank you.

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MoneyNing December 5, 2013 at 4:41 pm

Actually tuition for a private school isn’t an eligible expense, so unfortunately you aren’t suppose to claim that expense on your FSA.

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Kellie December 5, 2013 at 5:15 pm

I would like to know why is daycare reimbursement done as ONLY “money in, money out”, as oppose to dental and medical reimbursement is front loaded with the chosen amount, but I have to wait EVERY MONTH for my contribution to daycare and only then it’s the amount of my contribution divided by 12.

To make it clearer. I chose to contribute $1500, because my eligibility date was July, my contribution were divided by 11, SO, each month $136.36 comes from my check. I pay $500 a month in daycare. I pay my daycare once a month. Why is it that the rules ONLY allows me to be reimbursed $136.36 at a time, even though I am paying well above that a month. Who can I call in government to voice how unfair that is. I would rather my daycare contribution be front loaded for the entire amount that I chose rather than my medical portion. It’s ALWAYS garanteed that daycare will be a monthly expense.

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moe December 9, 2013 at 9:54 am

The IRS sent me a bill for the amount I claimed (3k x 20% = $600) on dependent care credit because I used the Company FSA of $5,000. The instructions say I can use both but not on the same $5,000 but my dare care tuition is 16k a year. Is the IRS wrong?

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lisa January 8, 2014 at 1:28 pm

I missed the deadline for reimbursement which I didn’t realize at the first place. I submitted an appeal but got denied. It is $2500, it really means a lot to us since both my husband and I are unemployed right now. I just wonder if there is any possible to get my money back?

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Venkat January 9, 2014 at 7:49 pm

I left my company in August, and when I tried to submit my claim, I knew that the run_out time ( 90 days from termination) is reached and my claim got rejected. HR told me that they sent me a letter, which I never received.

Is there way to get this amount from the FSA?

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Jim February 8, 2014 at 1:39 am

I know what you are going through. I quit a job in late August and tried to get reimbursed for $3500. ADP told me the 90 day window had expired. I’m in the appeal process but have little faith.

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Yahdinah February 4, 2014 at 3:18 pm

I pay for my grandson daycare while his mother goes to school, NOTE they no longer live in my house. How can I claim this yearly daycare bill on my tax. I pay over $1500 a year.

Need to know!!!

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Allie February 24, 2014 at 6:08 pm

If they do not live in your house, then you can NOT get any tax benefits for paying for the boy’s daycare.

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Sonal April 3, 2014 at 5:59 am

I missed the March 31 deadline to submit the claim form for the dependant care FSA for last year. I had contributed 5000$ towards it. I called up the insurance company and they mentioned i need to write an appeal letter explaining why I missed the deadline and send the claim with it and it will take anywhere from 30-90 days for a decision. Is there any option I might have to somehow not lose this money :(? Any suggestions on how to write the appeal letter?

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Rosi April 6, 2014 at 11:26 pm

Me too, left $5,000 in my account!!! Please let me know if you happen to find a solution. Many thanks!

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Jasmine April 7, 2014 at 3:21 pm

Same thing with me too, left $5000 in my account. I called my HR and they said they cannot help it as it is a regulatory requirement.
It will be really great if you can let me know if you happen to find a solution. Thank you in advance.

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