WHAT IS A DEPENDENT CARE FLEXBILE SPENDING ACCOUNT ?

A Dependent Care Flexible Spending Account (Dependent Care FSA) allows an employee to set aside pre-tax dollars in order to pay for daycare expenses. Expenses for food, education, or medical care may not be reimbursed from a Dependent Care FSA. In order for Dependent Care expenses to be eligible for reimbursement, they must:

• Allow the employee or the employee's spouse to be gainfully employed or to attend school, and
• Ensure a qualified dependent's well-being and protection.

A qualified dependent is a child under the age of 13 or a spouse that is incapable of self-care.

A married employee filing a joint return may set aside no more than $5,000 annually in his or her Dependent Care FSA. The Dependent Care FSA is subject to the use-it-or-lose-it rule. Therefore, money remaining in the account at the end of the Section 125 Plan year is forfeited.