DCFSA Guide

Turn caregiving into tax savings

Keep more of your hard-earned money. Plan your spending, know the rules and unlock amazing tax savings.

What is a Dependent Care Flexible Spending Account?

DCFSAs are tax-advantaged accounts that let you use pre-tax dollars to pay for eligible dependent care expenses. A qualifying ‘dependent’ may be a child under age 13, a disabled spouse, or an older parent in eldercare.¹

Expect Remarkable

24/7 member services

Award-winning mobile app²

Convenient Help Center

Easy account management

Plan your spending

It pays to be strategic.

Pay for dependent care expenses

Daycare

Nursery School

Preschool

Summer Day
Camp

Before or
After School
Programs

Elder Day Care

See the full list of eligible dependent care expenses See the full list of qualified expenses

Your savings can add up fast

Here’s an example based on $4,500 annual spending and a 30 percent effective tax rate.

Daycare
$300/mo.

Summer camp
$500

After school program
$50/mo.

Annual tax savings³

$1,350

Make your elections

Once you choose an annual contribution, your employer will deduct that amount pre-tax in equal parts from each paycheck. DCFSA funds are made available only as money is added to the account.

DCFSA Annual Contribution Limit

Tax year	Individual and family limit⁴
2023	$5,000
2024	$5,000

Know the rules

Don’t get caught by surprise. Carefully review your open enrollment materials.

Timing matters

Unused DCFSA funds are eventually forfeited back to your employer, so it’s important to be aware of spend-down deadlines. Consult your plan documents for complete details.

Enjoy an extra grace period
Your organization gives you extra time at the end of the plan year to spend down remaining DCFSA funds. You don’t have to spend it all this year. Consult your plan documents for exact timelines and details.

Limited election period

Elections can only be made during open enrollment unless you have a qualifying life event,⁵ which may include changes to:

Employment
status (Including
medical leave)

Marital status

Number of
dependents

Daycare closures

No double-dipping

You can’t get reimbursed twice for the same expense (example: reimbursement + deduction from tax returns).

We make it easy to get reimbursed:

Pay for your products or services
Upload your receipts online or in the mobile app
Choose reimbursement by check or have funds deposited directly into your bank account

Tools and resources

Check out these additional resources.

DCFSA webinar

Check out our webinar to discover what expenses are covered and strategies to maximize your annual savings.

DCFSA: Turn Caregiving into Tax Savings

A Dependent Care Flexible Spending Account (DCFSA) enables you to use pre-tax dollars for qualified dependent care expenses. Join our short webinar to discover what kind of expenses are covered and strategies to maximize your annual savings.

Explore other FSA types

FSA

Flexible Spending Account

Give yourself flexibility and amazing tax savings.

LPFSA

Limited Purpose Flexible Spending Account

Complement your HSA and save more on dental and vision.

¹Optional provision: The Consolidated Appropriations Act (CAA) 2021, temporarily allows for an eligible employee to be reimbursed expenses for dependents through age 13 (i.e., dependents who have not yet turned 14) for the 2020 plan year. To qualify for this relief, you must have been enrolled on or before January 31, 2020 and you must have unused amounts from the 2020 plan year. In addition, you must have one or more dependents who attained the age of 13 during the 2020 plan year. You may also take advantage of this relief for the next plan year if unused grace period amounts from the 2020 plan year or other funds carried over into the 2021 plan year. Please refer to your plan documents or employer communications to determine if this option is available under your plan.Return to content

²Accounts must be activated via the HealthEquity website in order to use the mobile app.Return to content

³The example used is for illustrative purposes only; actual savings may vary. The figure is based on average tax rates, including state, federal and FICA taxes.Return to content

⁴If Married Filing Separately your limit is $2,500.Return to content

⁵Please refer to your plan documents for more information.Return to content

HealthEquity does not provide legal, tax or financial advice. Always consult a professional when making life-changing decisions.