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Dependent care flexible savings account eligible costs.

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  • Dependent care flexible savings account eligible costs.

    My employer allowed an additional $4600 in 2021.

    I haven't used any of 2021's $5k yet. Add in another $5k in 2021 and you have $14600. One of my kids can't go to daycare due to health issues, so thought of hiring help. Lots of programs out there help individuals with payroll, withholdings, etc. But does anyone know if I can use funds from the $14600 for the fees that go with these payroll programs?

    Also, anyone know what happens to the funds if I leave the employer to go elsewhere?

    Thanks

  • #2
    We used our DCFSA to pay for our nanny.

    We issued our nanny a w2, she got a paystub with every paycheck (my husband did the payroll, we did not hire this part out). We submitted the paystubs to the DCFSA company for reimbursement. Everything was above the table and we needed to pay our share of taxes.

    I don’t see why you couldn’t use the documentation provided by your payroll company of choice for reimbursement.

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    • #3
      Did you mean that you haven't used 2020's $5k yet? These DCFSAs don't roll over the full amount, just $500. So you might have less than you think, more like 500+5000+4600. Anyway, yes, you can use the W2 from a payroll service for nanny care, for example. That's what I do, just upload it and get reimbursed. I use up our balance every year since our DCFSA limit is lower than what our nanny earns in the year, and my wife's employer didn't raise the contribution limit from $5k to $10k for this year

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