How a dependent care FSA works
A dependent care flexible spending account (DCFSA) can help you put aside dollars, income tax-free, for the care of children under the age of 13 or for dependent adults who can’t care for themselves. Your account is funded by payroll deductions before taxes. That money may help pay for a variety of services, including day care, nursery school, preschool, after-school or senior day care.
Things to consider before you enroll
Before you enroll, consider the following questions to help estimate your costs:
- What dependent care services will you need during the year?
- How often will you use these services?
- How much will everything cost?
Tax savings
Your taxable income is reduced by the amounts you deposit into your FSA accounts.
- Health care FSA max: $2,750
- Dependent care FSA max:
- Individual: $2,500
- Family: $5,000
What is a dependent care FSA?
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Self-directed mutual fund investment options are made available through the services of an independent investment advisor, or your plan sponsor. Discretionary advisory services are provided by Betterment LLC, an SEC-registered investment adviser, with associated brokerage transactions provided by Betterment Securities, Member FINRA/SIPC. For details and disclosures visit betterment.com. The Schwab Health Savings Brokerage Account is offered to certain account holders through Charles Schwab & Co., Inc., Member FINRA/SIPC. For details and disclosures, visit schwab.com. Brokerage services are offered to certain account holders through TD Ameritrade, Inc., Member FDIC/SIPC and a subsidiary of The Charles Schwab Corporation. For details and disclosures, visit tdameritrade.com.
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Flexible spending accounts (FSAs), dependent care assistance programs (DCAPs), health reimbursement arrangements (HRAs), Commuter and Parking Benefits, Tuition Assistance Plans, Adoption Assistance Plans, Surrogacy Assistance Plans, Wellness Benefits, and Lifestyle Accounts (collectively, “Employer-Sponsored Plans”) are administered on behalf of your plan sponsor by Optum Financial, Inc. or ConnectYourCare, LLC (collectively, "Optum Financial") and are subject to eligibility and restrictions. Employer-Sponsored Plans are not individually owned and amounts available under the Employer-Sponsored Plan are not FDIC insured. This communication is not intended as legal or tax advice. Federal and state laws and regulations are subject to change. Please contact a legal or tax professional for advice on eligibility, tax treatment, and restrictions. Please contact your plan administrator with questions about enrollment or plan restrictions.
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