The Dependent Care FSA allows you to use pretax dollars to pay for eligible expenses related to care for your child, disabled spouse, elderly parent, or other dependent who is physically or mentally incapable of self-care, so you (or your spouse) can work, look for work, or attend school full-time. Eligibility for the dependent care benefit requires that certain criteria be met, which is outlined in this document.

The TASC Dependent Care FSA allows you to use pre-tax dollars to pay for eligible expenses related to care for your child, disabled spouse, elderly parent, or other dependent who is physically or mentally incapable of self-care, so you (or your spouse) can work, look for work, or attend school full-time. Medical expenses for your dependent are not eligible for reimbursement under the Dependent Care FSA.

Eligibility for the dependent care benefit requires that certain criteria be met, which is outlined in this document.

A)  The dependent care expenses must be work-related. The care must be necessary for the employee and/or the employee’s spouse to work, to look for work, or to attend school full-time, or if they are physically unable to care for their children.

B)  The dependent care expenses provided during a calendar year cannot exceed $5,000. In the case of a separate return by a married individual, the limit is $2,500. This amount may be less if the employee’s earned income or spouse’s earned income is less than $5,000.

• All persons and organizations that provide dependent care for a qualified person must be identified. This information is requested on IRS Form 2441. The name, address, and taxpayer identification number of the provider must be included. Under certain circumstances, the taxpayer identification number will be a social security number.
• If the care is being provided by a center that cares for more than six persons, the center must comply with all state and local regulations.
• Payments made to relatives who are not dependents can be included. However, do not include amounts paid to a dependent for whom you can claim an exemption or for your child who is under age 19 at the end of the year, regardless of whether he or she is your dependent.
• Use Form W-10 to request the required information from the care provider.

Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if all of the following are true:

• The child was under age 13 or was not physically or mentally able to care for himself or herself.
• One or both parents provided more than half of the child’s support for the year and are divorced, legally separated, or lived apart at all times during the last 6 months of the calendar year.
• One or both parents had custody of the child for more than half of the year.
• You were the child’s custodial parent. The custodial parent is the parent having custody for the greater portion of the calendar year. If the child was with both parents for an equal number of nights the parent with the higher adjusted gross income is the custodial parent.

A non-custodial parent that is entitled to claim the child as a dependent on their tax return may not treat the child as a qualifying individual for the dependent care benefit even when that parent is financially responsible for providing the care. Only one parent (the custodial parent) may qualify for the dependent care benefit for a taxable year. The regulations do not provide any relief for a non-custodial parent that incurs dependent care expenses for the portion of the year in which they have custody of the child to enable the non-custodial parent to work.

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