When most people think of a Dependent Care Flexible Spending Account (FSA), “daycare” often comes to mind. But the truth is, Dependent Care FSAs can be used for a wide variety of eligible expenses — making them a powerful tool for working families year-round!
What Expenses Are Covered?
Your Dependent Care FSA can help with more than just traditional daycare. Qualified expenses include:
- Preschool and nursery school tuition
- After-school programs
- Summer day camps (not overnight camps)
- Babysitters or nannies (when used so you or your spouse can work)
- Before-school programs
- Licensed childcare centers and providers
For a full list of eligible expenses, see IRS Publication 503.
Make the Most of Your Pre-Tax Dollars
As families begin planning for summer, it’s a good time to review your Dependent Care FSA balance. These accounts let you pay for qualifying care with pre-tax dollars, reducing your taxable income and saving you money.
Contribution Limit
As of January 2026, the annual contribution limit for Dependent Care FSAs is set by statute at:
- $7,500
Don’t Forget About Qualifying Life Events
Life changes — and so do childcare needs. If you have a qualifying life event, such as:
- A child aging into a new care program (like summer camp)
- A change in your care provider
- Changes in your work schedule
You generally have 30 days from the event to update your Dependent Care FSA election. Taking timely action ensures you don’t miss the opportunity to adjust your pre-tax contributions as your family’s needs change.
Final Tips
- Keep your itemized receipts! You’ll need documentation to be reimbursed.
- Spend it or lose it: Funds must generally be used within the plan year, so plan accordingly.
Beth Goblirsch, Client Relations Specialist comments,
“Taking a few minutes to review your Dependent Care FSA can help your family save money and make the most of every season’s childcare needs.”
If you have any questions, visit with one of our Employee Benefit Administration experts at (888) 388-1040.
