Depending Care FSAs (DCFSAs)
DCFSA Tax Treatment
Last Updated: June 3, 2025Tax Benefits Pre-tax savings: Contributions are exempt from federal income tax, Social Security tax, and Medicare tax. Tax Advantages Dependent Care FSAs can offer significant tax savings—often 20% to 40% of your eligible expenses depending on your tax bracket. Example: You contribute $5,000 to a DCFSA. You avoid paying roughly $1,200–$2,000 in taxes (federal, Social...
What is a Dependent Care Flexible Spending Account (Dependent Care FSA or DCFSA)?
Last Updated: June 3, 2025A Dependent Care Flexible Spending Account (Dependent Care FSA or DCFSA) is a pre-tax benefit account used to pay for eligible dependent care expenses, like daycare, preschool, and summer camps. It’s a powerful tool to help working parents and caregivers save money while managing child or dependent care costs. A Dependent Care FSA is an...
How DCFSAs Work & Usage
Last Updated: June 3, 2025How It Works Enroll through your employer during open enrollment or after a qualifying life event. Choose your annual contribution, up to the IRS limit. Money is deducted from your paycheck pre-tax, typically spread evenly across the year. Submit claims for reimbursement for eligible expenses you’ve already paid. Note: Unlike healthcare FSAs, funds are not...
DCFSA Contribution Limits
Last Updated: June 3, 2025Annual Contribution Limit (2025): $5,000 per household $2,500 if married and filing separately