What Is a Qualifying Event for a Dependent Care FSA?

A Dependent Care Flexible Spending Account (DCFSA) allows employees to set aside pre-tax money from their paychecks to cover qualified care expenses for a child or dependent, which lowers taxable income. The amount you contribute is locked in for the plan year and can only be adjusted during your employer’s annual open enrollment period. An exception exists for certain major life changes, known as qualifying life events, which are defined by the IRS and permit mid-year adjustments.

Identifying a Qualifying Life Event

A qualifying life event is a personal change that significantly alters your need for dependent care, allowing you to modify your DCFSA contribution outside of the open enrollment window. The change you request must be consistent with the event. For instance, adding a dependent would justify an increase in your election, while a loss of a dependent might necessitate a decrease.

Changes in Your Household

Events such as marriage, divorce, legal separation, or the death of a spouse are all considered qualifying life events. These situations can change your household income and the number of individuals requiring care or able to provide it. For example, a marriage may introduce a spouse who can share caregiving responsibilities, while a divorce may make a parent newly responsible for all daycare costs.

Changes in Your Dependents

The birth or formal adoption of a child are qualifying events that increase care expenses. Similarly, if a dependent passes away, you are permitted to decrease your election. A dependent “aging out” is also a qualifying event. For a DCFSA, a child is eligible until they turn 13, so their 13th birthday marks a point where you must adjust contributions for their care.

Changes in Employment Status

A change in the employment of you, your spouse, or a dependent can alter your need for care. Starting a new job, experiencing a layoff, or termination all qualify. A switch in status, such as moving from part-time to full-time work that affects benefits eligibility, is also a valid reason. If a spouse stops working to stay home with a child, you may no longer incur daycare costs, justifying a decrease in your contributions.

Changes in Care Arrangements or Cost

Events related to your care provider or the cost of that care are qualifying events for a DCFSA. This includes a significant change in the cost of care, such as a daycare center implementing a rate increase. It also applies if you switch care providers or if a provider’s availability changes, such as a grandparent who provided free care no longer being able to do so.

Required Documentation and Information

Your employer will require you to provide proof of the qualifying life event. This documentation serves as evidence that the change is permissible under IRS rules and gathering it ahead of time will streamline the process.

For events related to your dependents or marital status, you will need official legal documents. If you have a baby or adopt, a birth certificate or a final adoption decree is necessary. In the case of a marriage, you must provide a marriage certificate, while a divorce or legal separation requires a copy of the divorce decree or separation agreement.

When the qualifying event involves a change in care costs or providers, the required proof will come from the provider. If your daycare provider raises their rates, you will need to submit a formal letter from them that states the new cost and its effective date. If you switch providers, you may need documentation showing the termination of services with the old provider and an agreement with the new one.

Your employer will have a specific “Change in Status” or “Life Event” form that you must complete. You will need the exact date the qualifying event occurred and your new annual contribution amount. This form is available through your company’s human resources department or on an internal benefits web portal.

The Process for Changing Your Election

You must act within a specific timeframe to report an event and request a change. The deadline is determined by your employer’s plan documents, but many plans provide a 30- or 60-day window. Missing this reporting window means you will forfeit the opportunity to change your election until the next open enrollment period.

The method for submitting your request depends on your employer. Many companies use an online benefits portal where you can upload digital copies of your form and supporting documents. Other methods include emailing the required paperwork to the HR department or submitting physical forms.

After you submit your request, your employer or benefits administrator will review the documentation. They ensure the requested change is consistent with the event. Once approved, you will receive a confirmation notice, and the adjustment to your paycheck deduction will take effect on the next available pay period. The change does not apply retroactively, with the possible exception of a birth or adoption.