IRS Announces 2025 Contribution Limits for FSAs, Commuter Benefits
October 22, 2024
Dependent Care Assistance Account
What is it?
It’s no secret that childcare and elder care can be a necessary but costly expense. Luckily, when you enroll in a Dependent Care Assistance Account you can pay for eligible daycare, after-school care and senior care with pre-tax money, relieving some of the financial burden of caring for loved ones.
How does it benefit you?
A Dependent Care Assistance Account is a type of FSA that enables you to save approximately 30% – 40% on your dollar, depending on your tax bracket. Use this pre-tax account to pay for your required daycare expenses and save money throughout the year.
What is a Dependent Care FSA?
Watch Video
Manage Your Account Online
Create your online account so you can submit claims, check your account balance, sign up for direct deposit and more. Download our mobile app to conveniently access your account anytime, anywhere. You can also manage your account when you log into your account from any of your mobile devices.
How to Log Into Your Account
Watch Video
P&A Mobile App
Learn how to use P&A's mobile app to manage your P&A account. Penny Panda shows you how in this tutorial. Please note: this app is available for FSA, HRA, Commuter, and COBRA participants.
Watch VideoDownload P&A’s MyBenefits Mobile App
Contribute
Do I Qualify to Have an Account?
For the purposes of your Dependent Care Assistance Account, you can use the account to pay for eligible expenses for a qualifying individual. A qualified individual is defined as the following:
- A child under age 13 who qualifies as a dependent for income tax purposes.
- A spouse who is physically or mentally unable to care for himself or herself.
- A parent who is unable to care for himself or herself and who qualifies as a dependent for income tax purposes.
- A child who is not under age 13 but mentally or physically incapable of self-care.
What Can I Be Reimbursed For?
A Dependent Care Assistance FSA does not have a uniform coverage rule, meaning you can only be reimbursed up to the amount you’ve accumulated in your account — a pay-as-you-go approach. Eligible expenses are defined as those that enable you (and your spouse) to work, look for work, or be a full-time student.
Contribution Maximum
You can contribute a maximum annual contribution of $5,000 ($2,500 for married participants filing a separate income tax return), but not more than the lesser of the earned income of you or your spouse. If your spouse is a full-time student or incapacitated, the maximum annual election is $3,000 for one child or $5,000 for two or more children.
Eligible Dependent Care Expenses |
Ineligible Dependent Care Expenses |
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| *While after school programs are an eligible expense, activity fees for music/dance lessons and after school sports activities are not eligible for reimbursement. |
A stipulation imposed by the IRS is that the service provider must be over 18 years of age and cannot be an individual for whom a personal tax exemption may be claimed. If you are unsure if an expense is eligible for reimbursement, please contact P&A Group through Online Chat or at (716) 852-2611.
Use Your Account & Get Reimbursed
Typically, you will need to pay-out-of pocket for your eligible dependent care expense and submit a claim to P&A for reimbursement. However, the Benefits Card may be available to use if your employer offers it with this account.
What Documentation Must Be Included When Submitting a Claim?
All Dependent Care claims must include the following in order to be processed for reimbursement:
- A completed claim form with employee signature
- An invoice or receipt from your service provider with the following:
- Provider name
- Service description
- Dollar amount
- Service start and end dates. If dates of service are not listed on the receipt, please submit a claim form signed by your provider OR have your provider enter the dates of service on the receipt and sign and date it.
Get Your Reimbursement Fast
Enroll in direct deposit and have your reimbursement deposited directly into your designated checking or savings account. With direct deposit, P&A’s typical turnaround time is less than 24 hours from the point a claim is approved. If you don’t enroll in direct deposit, a reimbursement check will be mailed to your home, which can take anywhere from 10-15 business days.
How to Submit a Claim
If you’re unable to use your Benefits Card, you can pay out-of-pocket for your expense and submit a claim for reimbursement.
How To Submit A Claim
Watch Video
Ways to Submit a Claim
With P&A, there are numerous ways to submit a claim for reimbursement.
MyBenefits Account
Log into your P&A MyBenefits account and click Upload Claim/Documentation to submit a claim.
All claims must be accompanied with a receipt/proof of purchase that includes the date(s) of service and service(s) rendered. Estimates or statements with previous balances are not sufficient. Additional information may be requested if a receipt/proof of purchase contains an estimate, previous balance or does not contain service and services rendered.
Sign up for Direct Deposit
Enroll in direct deposit and have your reimbursement deposited directly into your designated checking or savings account. With direct deposit, P&A’s typical turnaround time is less than 24 hours from the point a claim is approved. If you don’t enroll in direct deposit, a reimbursement check will be mailed to your home, which can take anywhere from 10-15 business days.
To sign up for direct deposit, log into your account and go to Direct Deposit under Quick Links. Please note, it can take up to 15 days to verify your banking info and set up direct deposit in your MyBenefits account.
Using Your Benefits Card to Submit a Claim
If your employer offers it, and you want to use the Benefits Card to pay for a dependent care eligible expense, please keep the following points in mind:
- Your provider must accept MasterCard debit/credit cards
- Your full annual election is not available up front. Since your available balance accrues as your payroll deductions occur, you can only use your Benefits Card up to the dollar amount available in your account, which may be less than your dependent care expense.
- Keep a copy of your receipt for your records in the event you are requested to provide documentation of your expense.
Manage Your Account Online
Create your online account so you can submit claims, check your account balance, sign up for direct deposit and more. Download our mobile app to conveniently access your account anytime, anywhere. You can also manage your account when you log into your account from any of your mobile devices.
How to Log Into Your Account
Watch Video
P&A Mobile App
Learn how to use P&A's mobile app to manage your P&A account. Penny Panda shows you how in this tutorial. Please note: this app is available for FSA, HRA, Commuter, and COBRA participants.
Watch VideoDownload P&A’s MyBenefits Mobile App
Contribute
Do I Qualify to Have an Account?
For the purposes of your Dependent Care Assistance Account, you can use the account to pay for eligible expenses for a qualifying individual. A qualified individual is defined as the following:
- A child under age 13 who qualifies as a dependent for income tax purposes.
- A spouse who is physically or mentally unable to care for himself or herself.
- A parent who is unable to care for himself or herself and who qualifies as a dependent for income tax purposes.
- A child who is not under age 13 but mentally or physically incapable of self-care.
What Can I Be Reimbursed For?
A Dependent Care Assistance FSA does not have a uniform coverage rule, meaning you can only be reimbursed up to the amount you’ve accumulated in your account — a pay-as-you-go approach. Eligible expenses are defined as those that enable you (and your spouse) to work, look for work, or be a full-time student.
Contribution Maximum
You can contribute a maximum annual contribution of $5,000 ($2,500 for married participants filing a separate income tax return), but not more than the lesser of the earned income of you or your spouse. If your spouse is a full-time student or incapacitated, the maximum annual election is $3,000 for one child or $5,000 for two or more children.
Eligible Dependent Care Expenses |
Ineligible Dependent Care Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| *While after school programs are an eligible expense, activity fees for music/dance lessons and after school sports activities are not eligible for reimbursement. |
A stipulation imposed by the IRS is that the service provider must be over 18 years of age and cannot be an individual for whom a personal tax exemption may be claimed. If you are unsure if an expense is eligible for reimbursement, please contact P&A Group through Online Chat or at (716) 852-2611.
Use Your Account & Get Reimbursed
Typically, you will need to pay-out-of pocket for your eligible dependent care expense and submit a claim to P&A for reimbursement. However, the Benefits Card may be available to use if your employer offers it with this account.
What Documentation Must Be Included When Submitting a Claim?
All Dependent Care claims must include the following in order to be processed for reimbursement:
- A completed claim form with employee signature
- An invoice or receipt from your service provider with the following:
- Provider name
- Service description
- Dollar amount
- Service start and end dates. If dates of service are not listed on the receipt, please submit a claim form signed by your provider OR have your provider enter the dates of service on the receipt and sign and date it.
Get Your Reimbursement Fast
Enroll in direct deposit and have your reimbursement deposited directly into your designated checking or savings account. With direct deposit, P&A’s typical turnaround time is less than 24 hours from the point a claim is approved. If you don’t enroll in direct deposit, a reimbursement check will be mailed to your home, which can take anywhere from 10-15 business days.
How to Submit a Claim
If you’re unable to use your Benefits Card, you can pay out-of-pocket for your expense and submit a claim for reimbursement.
How To Submit A Claim
Watch Video
Ways to Submit a Claim
With P&A, there are numerous ways to submit a claim for reimbursement.
MyBenefits Account
Log into your P&A MyBenefits account and click Upload Claim/Documentation to submit a claim.
All claims must be accompanied with a receipt/proof of purchase that includes the date(s) of service and service(s) rendered. Estimates or statements with previous balances are not sufficient. Additional information may be requested if a receipt/proof of purchase contains an estimate, previous balance or does not contain service and services rendered.
Sign up for Direct Deposit
Enroll in direct deposit and have your reimbursement deposited directly into your designated checking or savings account. With direct deposit, P&A’s typical turnaround time is less than 24 hours from the point a claim is approved. If you don’t enroll in direct deposit, a reimbursement check will be mailed to your home, which can take anywhere from 10-15 business days.
To sign up for direct deposit, log into your account and go to Direct Deposit under Quick Links. Please note, it can take up to 15 days to verify your banking info and set up direct deposit in your MyBenefits account.
Using Your Benefits Card to Submit a Claim
If your employer offers it, and you want to use the Benefits Card to pay for a dependent care eligible expense, please keep the following points in mind:
- Your provider must accept MasterCard debit/credit cards
- Your full annual election is not available up front. Since your available balance accrues as your payroll deductions occur, you can only use your Benefits Card up to the dollar amount available in your account, which may be less than your dependent care expense.
- Keep a copy of your receipt for your records in the event you are requested to provide documentation of your expense.