Dependent Care FSA FAQs

A dependent care FSA is a spending account that lets you set aside money on a pre-tax basis to pay for qualified day care expenses for children or other eligible dependents. With a dependent care FSA, a portion of your paycheck is deposited into your account on a pre-tax basis and you can then use these funds to pay for eligible out-of-pocket expenses.

You can use your dependent care FSA to pay for eligible day care expenses. Examples of eligible expenses include:

Childcare Expenses

• Childcare at home or at a day care facility
• Sick childcare center or facility
• 3K or 4K
• Nursery or preschool
• Before and after school programs
• Day camp (may include sports camp, computer camp, etc.)
• Au pair or nanny
• FICA and FUTA payroll taxes of day care provider
• Miscellaneous fees related to dependent care (i.e. agency fees, application fees, hold the spot fees, late fees, registration fees, etc.)
• Transportation fees provided by the dependent care provider for transportation to/from where care is provided

Adult Care Expenses

• Adult day care center
• Custodial elder care (in-home or away from home)
• Transportation fees provided by the dependent care provider for transportation to/from where care is provided

With an FSA, you save approximately 30%* on your eligible expenses, making a $1,000 expense cost you about $700. You get these savings because the contributions you make to your FSA are exempt from Federal, State, and FICA payroll taxes.

*This tax example is a broad approximation of tax liability. Further, your contributions may be subject to state income tax in some states. Your specific savings depend on your tax bracket. You should consult a tax advisor for help with your own situation. Current IRS tax laws control all pre-tax payment and contribution matters and are subject to change.

The dependent care FSA annual maximum contribution is $2,500 for those that are married and filing separately and $5,000 for those that are single or married and filing jointly. The maximum annual contribution amount refers to the maximum amount of FSA dollars that you and your employer combined can contribute to your FSA.

Refer to our Plan Limits Page for the maximum annual contribution limit for dependent care FSAs.

You can pay for qualified expenses with your dependent care FSA by submitting a claim for reimbursement. You can use the following methods to submit a claim:

• Mobile App: Download EBC Mobile in the App Store or Google Play. Use your online account information to log in.
• Online Account: Log in and submit a claim at ebcflex.com.

You can only be reimbursed for care that has already been received so we recommend that you wait to submit your claims until the period of care you’ve paid for has passed.

You should always save your receipts and documentation for any dependent care FSA transactions. All dependent care FSA claims require documentation that verify that the expense is eligible.

Expense documentation must include:

• Date of service
• Amount of the expense incurred
• Name of service provider
• Description of the services or products received

If you are unable to get an itemized receipt from your provider, you can complete our claim form, which includes a service provider signature field for your provider to sign.

When you sign up for direct deposit, you get your money faster and have your reimbursement funds deposited electronically and securely in your checking or savings account. Learn more about setting up direct deposit at www.ebcflex.com/directdeposit

With a dependent care FSA, you do not have access to all of your funds at the beginning of your plan year. With the dependent care FSA, your reimbursements are limited to the amount you have contributed to your dependent care FSA at the time you request reimbursements.

Dependent care FSA claims cannot be reimbursed until after the last day of service listed. For example, if you submit a claim that includes an 8-week period of care, your reimbursement will not be sent until the last day of the eighth week. To be reimbursed faster, you can file each week of care as a separate claim and receive reimbursements as each week passes.

With a dependent care FSA, you can only receive reimbursements for claims up to the amount that has already been deducted from your paycheck. This means that if you submit an eligible claim for more than what has been deducted from your paycheck, you will not receive the full reimbursement until more funds become available in your dependent care FSA.

You can submit your dependent care FSA claims as frequently as you would like. However, your expense will only be reimbursed after the service has been provided and all dates of service have concluded.

We recommend waiting to enroll in a dependent care FSA until after your child is born or adopted and registered with their care provider. This means you need to make sure to sign up within 30 days of the dependent care event so you don’t miss your opportunity.

Life circumstances are not always predictable and your need for dependent care plans may change unexpectedly if your child has unforeseen needs or a family member suddenly volunteers to help out. Once you enroll in the dependent care FSA, you are only able to change your election if you experience a new set of circumstances that qualify as a permitted election change event.

You can only change the amount you contribute to your dependent care FSA when you experience a permitted election change event. Examples of a permitted election change event include a change to your marital status, the number or eligibility of your dependents, or a change to you or your spouse’s employment status. It’s important to note that some events only allow a change if the event caused a change to plan eligibility.

You are also allowed to update your contributions mid-year if your care provider changes or if they significantly decrease or increase their rates during the plan year. In order for this type of event to permit a change, the provider cannot be your relative.

To fully take advantage of your dependent care FSA, you have to spend all of your FSA funds by the end of your plan year. Any unused funds will be forfeited to your employer.

A runout period is an administrative period of time following the end of your plan year that gives you extra time to submit claims for eligible expenses that were purchased during your plan year.

It is important to note that not all employers offer runout periods. To see if your employer offers a runout period, review your My Company Plan. To access your My Company Plan:

1. Log in to your online account
2. In the main menu, select BESTflex Plan under the Account Information section

Once you have registered your online account, you can add an authorized user to your FSA. Authorized users are able to ask questions about your accounts. To add an authorized user, complete the Participant Authorization Form available at www.ebcflex.com/forms.

If you become ineligible to participate in an FSA for any reason, such as a termination of employment or a reduction in hours, contributions to your plan stop.

However, you can continue to submit claims for reimbursement from your dependent care FSA for service dates through the end of the plan year in which you lost eligibility as long as you submit the claim by the end of the plan’s standard runout period as identified in your My Company Plan.

To access your My Company Plan:

1. Log in to your online account
2. In the main menu, select BESTflex Plan under the Account Information section

Additional information about runout periods can be found in the above question: What is a runout period?

You must file a Form 2441 with your Form 1040. For each provider of dependent care, you will need to provide their name, address and taxpayer identification number on the Form 2441. Usually, the taxpayer identification number will be an employer identification number (EIN) if the dependent care provider is a business with employees. The taxpayer identification number will be a social security number (SSN) if the dependent care provider is an individual. You are responsible for obtaining the name, address, and taxpayer identification numbers of dependent care providers if you wish to claim a tax exclusion for reimbursements from a dependent care FSA. If a dependent care provider refuses to provide you with their taxpayer identification number, you will need to attach an explanatory statement to your tax return. If you have any questions about claiming a tax exclusion for reimbursements from a dependent care FSA when you file your taxes, consult with your personal tax adviser.

Yes, as long as the relative providing care is not claimed by you or your spouse as a tax dependent, you can be reimbursed for the amount you pay them for care of your dependent. Use caution in these circumstances because to be considered an eligible expense, the person you are paying for babysitting must claim the amount that you are reimbursing them for from your dependent care FSA as taxable income.

Yes, your dependent care FSA can reimburse you for expenses paid to a babysitter under the age of 19 as long as the babysitter is not you or your spouse’s child, stepchild, foster child, or tax dependent. The babysitter will be required to provide you with their social security number so that you can claim a tax exclusion for reimbursement from a dependent care FSA. The babysitter will also need to claim their earnings as income.

For more information about claiming a tax exclusion for reimbursement from a dependent care FSA, read the above question: How do I claim a tax exclusion for reimbursements from a dependent care FSA when I file my taxes?

You cannot use dependent care FSA funds to pay for tutoring because this is considered an educational expense and not a dependent care expense.

Day camp expenses are eligible for reimbursement from dependent care FSAs.

Overnight camp expenses are not reimbursable by a dependent care FSA. Overnight camps that separate out their daytime activities from their overnight activities are still not considered reimbursable by a dependent care FSA even though standalone day camps are considered reimbursable.

No, IRS regulations state that an expense that is eligible for payment from a dependent care FSA must be for a dependent child under the age of 13, unless they are physically or mentally unable to care for themselves.

No, for a dependent care expense to be eligible for reimbursement from a dependent care FSA, the care must be in place so that you and your spouse can work, actively look for work, or attend school full-time. Actively looking for work means researching and applying for jobs, attending interviews, or related activities.

Yes, dependent care FSA funds may be used for adult day care, provided the adult meets the definition of a “qualifying individual.” A qualifying individual is someone who is mentally or physically incapable of self-care and has the same principal place of abode as you for more than half of the year. In addition, to be eligible for care outside of the home, the qualified individual must spend at least eight hours a day in your home.

Yes, if you (and your spouse if married) are employed, you can be reimbursed from your dependent care FSA for adult care in your home, provided the adult meets the definition of a “qualifying individual” and the caretaker is providing custodial care. A qualifying individual is someone who is mentally or physically incapable of self-care and has the same principal place of abode as you for more than half of the year.

No, a nurse is considered a healthcare expense instead of a dependent care expense. Healthcare expenses cannot be reimbursed from a dependent care FSA.

Yes, dependent care FSA funds may be used for your spouse’s eligible dependent care expenses. Your spouse is a qualifying individual if he or she is mentally or physically incapable of self-care and has the same principal place of abode as you for more than half of the year. In addition, to be eligible for care outside of the home, your spouse must spend at least eight hours a day in your home.