Whether it's back-to-school time or even end-of-the-year crunch time, you may have a sudden curiosity for who else can benefit from your FSA. If you've stumbled upon us and aren't sure what an FSA is, find out everything you need to know here.
If you're already up to speed, follow along as we cover the 2 ways an FSA can be leveraged for others, as well as some common eligible expenses your family can take advantage of.
FSA vs. DCFSA
FSAs (flexible spending account) and DCFSAs (dependent care flexible spending account) function very differently. Each has its own definition of a dependent and they cover separate expenses. Find out which account is best for you by reviewing our breakdown of an FSA and DCFSA.
FSA qualifying dependents
In general, qualifying dependents are your spouse, children, or relatives. Additional criteria is as follows:
- You must be legally married to your spouse
- Children must be under 27 years old
- Your relative must be claimed on your tax returns
Upon receiving your FSA debit card, you can request up to 3 more cards for qualifying dependents.
DCFSA qualifying dependents
In order to qualify for a DCFSA your spouse, child, or relative must meet the following requirements:
- Children under the age of 13
- Spouse or relative who resides in your home and is physically or mentally incapable of caring for themselves
DCFSAs are designed to pay for eligible dependent care services so you can continue to work.
Since an FSA & DCFSA have distinct functions, eligible expenses look very different for each account.
Think of your FSA as an extension for your dependents. They can benefit from all of the same eligible expenses that you can. The most common expenses are related to:
- Vision exams & prescription eyewear
For a list of more creative ways to spend your flex funds, visit Last Minute Ideas for Your Flex Spending Dollars.
While a DCFSA does not cover expenses like private school, dance lessons, house cleaning, or food, here are some examples of what it does cover:
- Elder care/adult day care center
- Before & after school programs
- Work-related babysitting/nanny
- Nursery school & preschool
- Day camps
It's important to grasp the essence of what constitutes an eligible dependent care service. Some services appear the same, but one is covered and the other isn't. For example, while an adult day center is an eligible expense, a nursing home is not. Similarly, a children's day camp is eligible, but a sleep-away camp is not. A DCFSA exists to cover necessary care, rather than voluntary expenses.
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Disclaimer: This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.