Eligible Dependent Care Expenses

A Dependent Care Spending Account is a simple way to save money on quality care for your loved ones. It allows you to set aside pre-tax dollars to pay for day care expenses. Eligible expenses are day care expenses for eligible dependents (see below) that are incurred so you and your spouse can work. To qualify, you and your spouse must be employed, or your spouse must be a full-time student.

If you’re married and you file a joint return, or you file a single or head of household return, the annual IRS limit is $5,000. If you’re married and file separate returns, you can each elect $2,500 for the calendar year.

Eligible dependents include:

• Children under age 13 who are claimed as a dependent for tax purposes

• Care of a disabled spouse or disabled dependent of any age

Ineligible expenses:

• Costs already claimed as a dependent care tax credit on your income tax return

• Nursing home, respite care or other residential care centers

• Services provided by one of your dependents

• Nighttime babysitting expenses that are not work related

• Expenses while absent for work for more than two weeks at a time

• Costs paid to your own dependents, under age 19, who are caring for your own dependents

• Expenses paid for schooling for kindergarten or higher

IRS Publication 503 is your guide for information related to who is a qualified dependent, what are qualified expenses and other information related to your personal circumstances.