Dependent Care FSA Calculator
Calculate your Dependent Care Flexible Spending Account contributions and tax savings. Compare FSA benefits with traditional childcare expenses.
FSA Summary
FSA vs. Out-of-Pocket
Eligibility & Limits
Understanding Dependent Care FSAs
A Dependent Care Flexible Spending Account (FSA) allows you to set aside pre-tax dollars to pay for eligible childcare expenses. This can significantly reduce your taxable income and save you money on taxes.
FSA Contribution Limits
| Filing Status | 2024 Limit | 2023 Limit |
|---|---|---|
| Married Filing Jointly | $10,500 | $10,500 |
| All Other Filers | $10,500 | $10,500 |
Eligibility Requirements
Taxpayer Requirements
- Earned income requirement
- Joint return if married
- Dependent care expenses
- Employer offers FSA plan
Dependent Requirements
- Child under age 13
- Spouse/parent incapable of self-care
- Lives with you for more than half the year
- Qualifies as your dependent
Eligible Expenses
Childcare
Daycare centers
Nannies & babysitters
After-school programs
Summer Camp
Day camps
Sports camps
Educational camps
Adult Care
Nursing homes
Adult day care
Home health care
Tax Benefits
FSA contributions reduce your taxable income, saving you both federal and state income taxes. The savings can be substantial depending on your tax bracket.
Tax Savings Calculation
Savings = FSA Contribution × (Federal Rate + State Rate)
Example: $5,000 contribution at 30% combined rate = $1,500 savings
Use-It-or-Lose-It Rule
Standard Rule
- Unspent funds forfeited at year-end
- Grace period until March 15
- $500 carryover allowed
- Plan-specific rules apply
Planning Tips
- Estimate expenses carefully
- Use grace period wisely
- Consider carryover options
- Track spending throughout year
FSA vs. Other Options
| Option | Tax Treatment | Flexibility | Use-It-or-Lose-It |
|---|---|---|---|
| Dependent Care FSA | Pre-tax | High | Yes |
| Child Care Credit | Post-tax credit | Medium | No |
| HSA | Triple tax advantage | Low | No |
Enrollment and Changes
Open Enrollment
- Annual enrollment period
- Choose contribution amount
- Review coverage options
- Understand plan rules
Mid-Year Changes
- Qualifying life events
- Marriage, divorce, birth
- Job loss or change
- Dependent status changes
Key Takeaways
- Dependent Care FSA allows pre-tax contributions for childcare
- 2024 annual limit is $10,500 for most taxpayers
- Tax savings can be 25-40% depending on your tax bracket
- Use-it-or-lose-it rule applies, but grace periods exist
- Eligible expenses include daycare, nannies, and summer camp
- Both parents must have earned income (joint filers)
- Contributions reduce federal and state taxable income
- Compare with Child Care Tax Credit for best option