Question of the Week - FSA Qualifying Dependents

Q.- We are allowing employees to elect up to the new IRS maximum for their dependent day care FSA. We want to provide a reminder about whose expenses are eligible for reimbursement under the FSA. What should we tell employees?

A.- Dependent Day Care FSA funds can be used to reimburse expenses for the care of qualifying individuals who allow the employee and, if applicable, the employee’s spouse to work, look for work, or attend school full-time. Eligible dependents include:

• Children under age 13 who live with the employee more than half the year.
• The employee’s spouse who is physically or mentally incapable of self-care and lives with the employee.
• Any other dependent (such as an elderly parent) who lives with the employee, is incapable of self-care, and whom the employee claims as a tax dependent on their federal return.

Expenses must be for care that enables the employee to work and not for education, overnight camps, or non-work-related babysitting.

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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.