Paying for care
Dependent care flexible spending account
A dependent care flexible spending account is an employer plan that lets an employee set aside pre-tax pay for care costs so the employee can work. A qualifying person can be a disabled spouse or another disabled person who lives with the employee for more than half the year.
Why it matters for your family
This account can apply to adult care, not only child care. The IRS says a disabled person who cannot dress, clean, or feed themselves due to a physical or mental disability may be a qualifying person. The care must allow the employee to work or look for work, and the person must live with the employee more than half the year. A common mistake is to assume a parent living elsewhere qualifies. Employer plans set their own deadlines and limits. Check with your benefits office and ask a tax professional about Form 2441.
Source: irs.gov
Related terms
- Health savings account (HSA)A health savings account is a tax-favored account for people with a qualifying high-deductible health plan.
- Medical expense tax deductionThe medical expense tax deduction lets people who itemize deduct medical and dental costs above 7.5 percent of adjusted gross income.
- Adult day careAdult day care is a community program that gives adults supervised daytime care outside the home.
- Household employer and nanny taxA household employer is a person who pays someone to work in or around their home and controls how the work is done.
- Private payPrivate pay means a family pays for care directly from its own money.
- Family caregiverA family caregiver is a relative, partner, friend, or neighbor who gives unpaid help to someone with an illness, disability, or age-related needs.
