A Dependent Care Flexible Spending Account (DCFSA) allows you to set aside money from your paycheck (no tax withholding) to pay for dependent care expenses. DCFSA is for care expenses of a child under 13 and/or an adult incapable of self-care, that enables you to work.
The advantage is that you're saving pre-tax dollars, so you end up paying fewer taxes on your salary and have more to spend. Most employees save at least 25% on each dollar set aside in their FSA. If you are married, your spouse must also work/be a full-time student and the dependent must be claimed on your tax return. If you are divorced, you must be the custodial parent, but are not required to claim the exemption.
Maximum Contribution Limits
2024 - $5,000
2025 - $5,000
*Per family for single and married employees ($2,500 if married and filing separate tax returns) for dependent care.
Eligible expenses
- For the care of one or more members of your home who are qualifying persons. If you are part of a divorced household, you must be the custodial parent for more than 50% of the year regardless of whether you are entitled to claim the person as a dependent on your income tax return; and
- Necessary to allow you (and your spouse), to work, look for work or attend school full-time.
A qualifying person is:
- Someone for whom you provide over half of their support and who does not have income in excess of the federal exemption amount; and
- Is your qualifying child under age 13 who shares your residence; or
- Is your spouse or qualifying child or qualifying relative who is physically or mentally unable to care for him/herself who shares the same residence with you. Physical or mental incapacity must be disabling. Persons who are not able to dress, clean or feed themselves because of physical or mental problems are considered unable to care for themselves. Persons with mental defects who require constant attention to prevent them from injuring themselves or others are considered unable to care for themselves.
Only "paid" eligible daycare expenses are reimbursable (examples below). For a complete list of eligible expenses, visit ASI Eligible Expenses.
- Before and after-school care
- Baby sitter
- Day camps (summer or holiday)
- Daycare
- Elder care (adult must live with you at least 8 hours a day and be claimed as a dependent on your Federal Tax return)
- Household help (duties must include caring for an eligible dependent)
- Late pick-up fees
- Placement services
Ineligible expenses
Expenses related to care that are not considered eligible expenses (examples below). For a complete list of eligible expenses, visit ASI Eligible Expenses.
- Care while you are not working (maternity leave, FMLA, workers' compensation leave)
- Care for a child for whom you have 50% or less physical custody
- Care for a child age 13 or older who is not disabled
- Overnight camps
- Instructional or sport-specific camps; e.g. ballet camp soccer camp, summer school
- Expenses paid to your child under age 19 or to someone you or your spouse can receive a personal exemption for as a dependent
Recurring Direct Pay Benefit: ASIFlex offers a convenient Recurring Direct Pay program for payments to dependent care providers. With Recurring Direct Pay, you no longer need to submit a claim for every payment. This is a free service with a one-time initial set up between you, your provider, and ASIFlex. After set up, ASIFlex will pay your dependent care provider directly from your ASIFlex account on the schedule you and your dependent care provider choose! To learn more, go to Recurring Direct Pay Program.