Dependent Care Spending Account

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Working families often need help with child and elder-care expenses.  A dependent care flexible spending account allows you to use pretax dollars to pay for your dependent-care expenses. ADP administers the dependent care accounts.  Some examples of the expenses covered by the dependent care spending account include:

• Child daycare
• Senior daycare
• Before-and-after school programs
• Sick childcare services while you're at work

Since it is a flexible spending account, you save taxes on the funds you set aside.  However, like all FSAs, you must use the funds or you will lose them, so it's important to estimate your covered expenses carefully.  You can contribute up to $5,000 in the dependent care spending account, however there are some additional restrictions dependent upon your marital status and tax filing.  For more information see the chart below.

Special Note for Highly Compensated Employees:

Dependent care spending accounts are subject to annual non-discrimination testing.  If our participation results do not satisfy the non-discrimination threshold, highly compensated employees (as defined by the IRS) may have their contributions reduced to a level that will allow for compliance.