Dependent Care Assistance Account

It’s no secret that childcare and elder care can be a necessary but costly expense. Fortunately, with a Dependent Care Assistance Account, you can pay for eligible day care, after school care, and senior care with pre-tax money, relieving some of the financial burden from caring for your loved ones.

Substantial Tax Savings

Because your contributions are deducted from your pay before taxes, you save 30-40% on your dollar (depending on your tax bracket). For example, to take home $400 of post-tax money, you would need to earn about $520, but by using a Dependent Care Assistance Account, you only need to make $400. 

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, including:

  • Child care centers that care for six or more children and that meet the IRS’s definition of a qualified day care center
  • Caregivers for a disabled spouse or dependent who lives with the participant
  • Eligible babysitting
  • Nursery schools

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.

Contribution Maximum

The maximum annual contribution is $5,000 ($2,500 for married participants filing a separate income tax return), but no more than the lesser of the earned income of the employee or his 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. The amounts are subject to change due to IRS guidelines.

Dependent Qualifications

For the purposes of your Dependent Care Assistance Account, a qualified person is defined as any of 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.

How to Get Reimbursed 

  • QuikClaim on Mobile Website - Submit a claim and supporting documentation of your eligible expense directly from your smartphone. Log into your account on your mobile device.
  • Online Claim Upload- After making a purchase, log in to your My Benefits account and click Upload Claim/Documentation under the Member Tools tab.  
  • Fax- submit a claim form via toll-free fax at (877) 855-7105.
  • Mail- mail a claim form to P&A Group, 17 Court Street Suite 500, Buffalo, NY 14202. 

Please make sure all dates of service and any itemized bill(s) are included with your claim. To receive reimbursement faster, sign up for direct deposit to have your money directly deposited into your designated checking or savings account.