What happens to unused dependent care FSA money?

It's generally forfeited at the end of the plan year. Dependent care FSAs don't allow the health FSA carryover, though some employers offer a short grace period to spend remaining funds.

Can I use a dependent care FSA for a nanny or summer day camp?

Yes. Nanny and babysitter costs, daycare, preschool and day camp all qualify as long as the care lets you work. Overnight camp doesn't count.

Can I use a dependent care FSA and claim the childcare tax credit?

You can use both, but not for the same expenses. Money you contribute to a dependent care FSA reduces the amount you can count toward the child and dependent care tax credit, and maxing out the FSA often uses up your credit-eligible expenses.

Can self-employed people get a dependent care FSA?

No. A dependent care FSA is an employer-sponsored benefit, so you need access through a job. Self-employed workers can still claim the child and dependent care tax credit if they qualify.

Mark Tovey, Writer at Finder

Mark Tovey

Writer

Mark is a freelance journalist whose work has been published in The Motley Fool and The Guardian, among other sites. He's worked as a data journalist and has a BA in Economics from the University of Sussex as well as an NCTJ journalism qualification.

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