Is Summer Camp Eligible for Dependent Care FSA?

A Dependent Care Flexible Spending Account (DCFSA) allows individuals to pay for eligible childcare expenses with pre-tax dollars. This employer-sponsored benefit reduces taxable income, leading to tax savings. It helps employees cover dependent care costs, enabling them and their spouse to work or seek employment. Understanding eligible expenses, especially summer camps, helps families maximize this advantage.

Dependent Care FSA Eligibility

Expenses must meet Internal Revenue Service (IRS) criteria for DCFSA reimbursement. Care must be for a qualifying individual: a child under 13, or a spouse or dependent of any age physically or mentally incapable of self-care who lives with the taxpayer. The care must be necessary for the taxpayer, and their spouse if filing jointly, to be gainfully employed, actively looking for work, or attending school full-time. This is known as the “work-related expense” test.

The care provider cannot be the taxpayer’s spouse, the child’s parent, a child of the taxpayer under age 19, or any dependent claimed on the taxpayer’s return. Common eligible care types include licensed daycare centers, preschool programs, and before or after-school care. The emphasis for eligibility is on providing supervision and care, rather than educational instruction or recreational activities.

Summer Camp Eligibility

Summer camps can qualify as a DCFSA expense, but conditions apply. Day camps are eligible if they primarily provide custodial care for a qualifying child under age 13. This includes day camps specializing in sports or computers, provided their main function is supervision during work hours. If a child attends a day camp for an entire week, but the parent does not work on one of those days, only the prorated portion of expenses covering the workdays can be reimbursed.

Overnight camps are not eligible for DCFSA reimbursement. The IRS considers the lodging component a non-qualifying expense, and their purpose often extends beyond work-related care to include recreational or educational aspects. Camps focused purely on educational instruction, such as tutoring, summer school, or specialized lessons, are not eligible. If a camp offers both eligible care and ineligible activities, only the allocable cost for the care portion may qualify, requiring detailed receipts to differentiate the services.

Claiming Dependent Care FSA Funds

Claiming DCFSA funds requires documentation and adherence to plan procedures. Reimbursement claims require itemized receipts or statements from the care provider. Documentation must include dates of service, amount charged, service type, dependent’s name, and the care provider’s Employer Identification Number (EIN) or Social Security Number (SSN).

Claims are submitted to the FSA administrator, usually through an online portal or a dedicated claim form. Submit claims within the plan’s deadlines, which often extend beyond the plan year end. Annual contribution limits are set by the IRS ($5,000 for single filers or married couples filing jointly; $2,500 for married individuals filing separately). Reimbursements are processed only for expenses already incurred and for which funds have been contributed. Reimbursements are not subject to payroll taxes.