Loyola University Chicago

Human Resources

Dependent Care FSA

A Dependent Care Flexible Spending Account is another IRS pre-tax benefit account used to pay for the care of eligible children or adults while you are at work. The money you contribute to a Dependent Care FSA is not subject to payroll taxes, so you end up paying less in taxes and taking home more of your paycheck. 

Eligibility
Eligible dependents are defined as children under age 13, or a spouse or legal dependent of any age whom is physically or mentally incapable of self-care. Eligible expenses include in-home care, care at another’s home, nursery or preschool tuition, after-school care, dependent care centers, summer day camp (if costs are reasonably comparable to other alternatives), and adult day care. To be reimbursed, you will need to provide detailed information about your dependent day care provider including name, address, and Social Security Number or Tax Identification Number. Without this information, you cannot be reimbursed.

2019 Contributions
Max 2019 contributions - $5,000 per household ($2,500 per spouse).

Contributions are not subject to federal income tax, Social Security tax or Medicare tax.

Limitations

  • Care for your dependent (who must reside in your home for at least eight hours a day) must be necessary in order for you and your spouse (if married) to work.
  • Eligible dependents are defined as children under age 13, or a spouse or legal dependent of any age whom is physically or mentally incapable of self-care.
  • Dependent care, such as private babysitting, may not be provided by someone who can be claimed as your dependent for tax purposes, such as an older son or daughter.
  • If dependent care services are provided at a day care center, the center must comply with applicable state and local laws and licensing requirements

Tax Considerations
The IRS requires anyone contributing to a Dependent Day Care FSA to complete Form 2441.

The IRS will not allow you to take the Dependent Care Tax Credit for expenses reimbursed through your FSA account. Depending on your personal situation, the Dependent Care Tax Credit may be more advantageous than the taxes saved with a Dependent Care FSA. Consult your tax advisor for more guidance.

Leaving the University
Only expenses incurred prior to the date your participation in the plan ends are eligible for reimbursement. You have 90 days to submit a claim that was incurred on or before your termination date. You may not continue a dependent care FSA through COBRA.