Can You Use a Dependent Care FSA for Summer Camp?

A Dependent Care Flexible Spending Account (DCFSA) helps working individuals manage dependent care costs. This pre-tax benefit allows participants to set aside funds from their paycheck for eligible expenses. Understanding how these accounts function, particularly concerning summer camp costs, can lead to significant tax savings. This article clarifies DCFSA eligibility, qualifying expenses for summer camp, and the reimbursement process.

Eligibility for Dependent Care FSA

To use a DCFSA, specific criteria for the dependent and care purpose must be met. The dependent must be under age 13 when care is provided. An exception exists for dependents of any age who are physically or mentally unable to care for themselves and live with the account holder for more than half the year. These individuals must also be a qualifying child or dependent for tax purposes.

Care expenses must be “work-related,” meaning they are necessary for the account holder, and their spouse if married, to work, look for work, or attend school full-time. If one spouse is physically or mentally unable to care for themselves, the care expenses incurred to allow the other spouse to work or look for work may also qualify.

Qualifying Summer Camp Expenses

Day camps are eligible for DCFSA reimbursement if their primary purpose is custodial care while parents work, seek employment, or attend school. This applies even if the day camp has a specific focus, such as sports or computers, as long as care is its main function. The expense must be for care provided on workdays.

Overnight camps are not eligible for DCFSA reimbursement. This ineligibility persists even if attempts are made to separate daytime care costs from the overnight portion. The Internal Revenue Service (IRS) views overnight camp expenses as not primarily employment-related.

Expenses for specific instructions or activities not primarily for custodial care do not qualify. This includes costs for summer school, tutoring, or specialized lessons like music, dance, or swimming, if billed separately or if they are the main focus rather than incidental to general care. Transportation, clothing, or activity fees not integral to general care are also excluded.

How to Use Your DCFSA Funds

To receive reimbursement for qualifying summer camp expenses, individuals must submit a claim to their DCFSA administrator. This process often involves an online portal or a paper claim form. Expenses are reimbursed after they are incurred, meaning after the service has been provided, not when payment is made.

Documentation is required to substantiate claims and includes an itemized receipt or invoice from the summer camp provider. This documentation must clearly state:
The name of the care provider
Their tax identification number (TIN) or Social Security Number (SSN)
The name of the dependent for whom care was provided
The specific dates of service
The type of service rendered (e.g., “summer day camp”)
The total amount charged

Some administrators may accept a claim form signed by the provider instead of a separate invoice. Reimbursement is issued via direct deposit or check, depending on the plan’s options. Be aware of specific deadlines for submitting claims, set by your plan administrator, which often extend into the following plan year, sometimes with a grace period. Maintaining accurate records helps ensure smooth claim processing.