How to Access Your Dependent Care FSA Funds

A Dependent Care Flexible Spending Account (DCFSA) is an employer-sponsored benefit that allows you to set aside money on a pre-tax basis to pay for dependent care. This means contributions reduce your taxable income, providing an immediate tax savings. The account helps pay for services necessary for you and your spouse to work, look for work, or attend school full-time.

Understanding Qualifying Expenses

To use your DCFSA funds, the expense must pass two tests established by the Internal Revenue Service (IRS). The first is the “qualifying person test,” which limits qualifying individuals to your dependent child under age 13, or a spouse or other tax dependent who is physically or mentally incapable of self-care and lives with you for more than half the year.

The second is the “work-related expense test,” which requires that care expenses be incurred to allow you and your spouse to work or actively look for employment. If one spouse is not working or looking for work, the expenses do not qualify. Examples of eligible expenses include payments for licensed daycare centers, preschool, before- and after-school care, and summer day camps. In-home care provided by a babysitter or nanny also qualifies if the purpose is to enable work.

Certain child-related expenses are ineligible for reimbursement. The cost of private school tuition for kindergarten and higher grades is considered an educational expense, not a care expense. Enrichment activities like music lessons, sports camps, or overnight summer camps also do not qualify because their primary purpose is education or recreation, not care that enables work.

Information and Documentation for Reimbursement

To receive your funds, you must prove the expense is eligible. A complete claim starts with obtaining the care provider’s full name, address, and Taxpayer Identification Number (TIN). The TIN is either a Social Security Number (SSN) for an individual provider or an Employer Identification Number (EIN) for a business and is necessary to report expenses on your tax return using Form 2441.

A detailed receipt or statement from your provider is required, as a simple credit card slip or canceled check is not sufficient. The documentation must clearly state the specific dates of service because you can only be reimbursed for care that has already been provided. A valid receipt must contain:

• The care provider’s name and TIN
• The name and age of the dependent who received care
• The specific dates of service (e.g., “June 1, 2025 – June 30, 2025”)
• A description of the service provided
• The total amount you paid

Some providers can sign a claim form directly, certifying the information as an alternative to providing a separate receipt.

The Reimbursement Process

Most FSA administrators offer several methods for submitting a claim. The most common methods are through an online portal or a mobile app, where you can upload scanned copies or photos of your itemized receipts. For those who prefer a more traditional method, submitting a paper claim form via mail or fax is an option.

The administrator will then review the claim to ensure the expense is eligible and the documentation is complete, a process that takes between five and ten business days. After the claim is approved, the reimbursement is issued. You can choose to receive the funds via direct deposit into your bank account or as a paper check mailed to your home.

Dependent care accounts are not pre-funded; you can only be reimbursed up to the amount that is currently available in your account from your payroll deductions. If your plan offers a debit card, you may be able to pay your provider directly, but you will likely still be required to submit the same detailed documentation afterward to substantiate the expense.

Navigating Deadlines and Forfeiture Rules

A DCFSA has a “use-it-or-lose-it” rule, an IRS regulation that requires you to forfeit any money left in your account after all deadlines have passed. The first date is the end of your plan year, which for most people is December 31. This is the last day you can incur eligible expenses using funds from that plan year.

Some employers offer a grace period, which is a 2.5-month window after the plan year ends (until March 15 for a calendar-year plan) during which you can continue to incur eligible expenses and use the remaining funds from the previous year. It is important to check with your employer to see if your plan includes a grace period, as not all do.

Every plan has a run-out period. This is the final deadline after the plan year or grace period ends for you to submit claims for reimbursement. A common run-out period is 90 days, meaning you might have until March 31 or later to file claims for expenses that were incurred during the prior plan year.