Dependent Care Flexible Spending Account

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Dependent Care Accounts cover amounts you pay to daycare centers, after school programs, babysitters, caregivers or elder care so that you and your spouse can work.

2023 Dependent Care FSA

Plan Year (Benefit Period): January 1, 2023 - December 31, 2023
Grace Period (if eligible): January 1, 2023 - March 15, 2024

Grace Period

The Grace Period for the 2023 Dependent Care FSA provides eligible participants with an additional 2 1/2 months (January 1 to March 15) to incur dependent care expenses for reimbursement from their 2023 Dependent Care FSA.

The Grace Period is applicable for the Dependent Care FSA only, if the following eligibility criteria are met:

• Must be an active participant as of December 31, 2023;
• Made a contributions during the entire plan year through payroll deduction or OTC (over the counter) payment.

Important Dates

Last Day to incur expenses:

• December 31, 2023 (if not eligible for the Grace Period), or
• March 15, 2024 (if eligible for Grace Period)

Last Day to submit claims: March 31, 2024

 

Qualifying Individuals

Dependent care expenses must be provided to Qualifying Individuals. A Qualifying Individual is defined as any of the following:

1. A person under age 13 who is your “qualifying child” under the Internal Revenue Code (the “code”). i.e., (a) he or she has the same principal residence as you for more than half the year, (b) he or she is your child or step-child (by blood or adoption), foster child, sibling or step-sibling, or a descendant of one of them; and (c) he or she does not provide more than half of his or her own support for the year.
   
   If you are divorced or separated, you must be the primary custodial parent of your child in order to be eligible for this account (irrespective of whether which parent may claim a personal exemption for the child on his or her federal income tax return). Non-custodial parents may wish to check with your legal or tax advisor to see if special rules apply to you that would enable you to utilize this account.
2. Your spouse if he or she is physically or mentally incapable of self-care and has the same principal abode as you for more than half the year.
3. A person who is physically or mentally incapable of self-care, has the same principal abode as you for more than half the year and is your tax dependent under the Code (for this purpose, status as a tax dependent is determined without regard to the gross income limitation for a “qualifying relative” and certain other provisions of the Code’s definition). 
   
   

Required Claim Documentation

A claim must include the name, address and taxpayer identification number of the dependent care service provider. In the case of a babysitter, the taxpayer identification number is the babysitter’s Social Security number. If you cannot remit a copy of your bill/contract, our daycare provider can sign your claim form which you can then upload as your “receipt.”

 

Eligible Dependent Care FSA Expenses

Eligible expenses are defined as those that enable you (and your spouse, if any) to be gainfully employed* or to seek employment.

They include the following:   

Expenses for services provided by a dependent care center (including a day camp) that complies with all applicable state and local laws and regulations;

• Daycare centers
• Nursery schools
• After-school programs

Expenses for the care of a Qualifying individual or for household services attributable in part to the care of a Qualifying individual

• Babysitters

Expenses for services outside of your household for the care of a qualifying individual other than a person under age 13 who is your qualifying child, provided that qualifying individual regularly spends at least eight hours per day in your household. In the case of any expenses for dependent care services provided by a child of yours, that child must be at least 19 years old at the end of the year in which the services were provided.

• Day camp
• Eldercare

*If your spouse is a full-time student or is physically or mentally not capable of self-care, he or she is treated as if gainfully employed. A spouse
is a “full-time student” if he or she is enrolled at and attends a school for the number of hours or classes that the school considers full time.
Your spouse must have been a student for some part of each of five calendar months during the year.

 

Prohibited Expenditures

Expenditures that are prohibited for reimbursement include the following:

1. Babysitting for social events;
2. Educational expenses;
3. Charges for overnight camp
4. Expenses that you will take as a child care tax credit on your income tax return; and
5. Expenses for services provided by your spouse, by a parent of your under-age-13 qualifying child or by a person for whom you or your spouse is entitled to claim a personal exemption on a federal income tax return.

 

Expense eligibility is subject to change.

If you are unsure if an expense is eligible for reimbursement, please call the P&A Group at (800) 688-2611 or chat with a customer service representative through our online chat available at www.padmin.com.

For a more extensive eligible expense list, please visit www.padmin.com. Go to Employee Participants → Benefit Programs → Tools & Resources and select PDF of FSA Eligible Expenses.

Maximum Annual Contribution

The maximum annual contribution is $5,000 ($2,500 if you are married and file separate income tax returns), but no more than the lesser of the earned income of you or your spouse. If your spouse is a full-time student or incapacitated, the maximum annual election is $3,000 for one child or $5,000 for two or more children. (Amounts subject to change due to IRS guidelines.)