FAQs

FAQs

What is the IRS use-or-lose rule and how does it work?

The IRS’ use-or-lose rule states that FSA funds must be spent by the participant within the FSA’s plan year. That means Dependent Care FSA participants need to spend all of their FSA funds by the end of the plan year. Unused funds at the end of the plan year are forfeited to the plan.

What happens if my child turns 13 during the plan year? Can I use the funds in my Dependent Care FSA account for the entire year?

No, you will only be reimbursed for eligible child care expenses incurred before your child’s thirteenth birthday. However, you may adjust your elections by filing for a Qualified Change in Status.

What happens if I terminate employment during the plan year?

Please check with your Human Resources department or contact Surency’s Customer Service department at 866-818-8805 to discuss the specific details of your plan.

If I participate in a Dependent Care FSA, will I still be able to claim the dependent care tax credit on my federal income tax return?

If you participate in a Dependent Care FSA, you are not allowed to claim any other Dependent Care tax benefits for the tax-free amounts you receive through this plan. However, you are allowed to claim expenses not reimbursed through your Dependent Care FSA. Consult your tax advisor to determine what’s best for you.

Can I use my Dependent Care FSA for domestic partners and their dependents?

No, you can only use your Dependent Care FSA for children or adults claimed as dependents on your tax return.

What happens if I submit a claim for an amount greater than what I have in my Dependent Care FSA account at the time?

If you submit a claim for an amount greater than what you have in your Dependent Care FSA account at the time, the portion of the claim that is above the amount you have in your account will remain “pending” until funds are available from future contributions.

If I pay my dependent care provider in advance of the services, can I file my claim after I pay?

No, only charges that have been fully incurred can be distributed for reimbursement. If you pay in advance, please wait until after the care has been provided before submitting the claim for reimbursement.

Do kindergarten charges qualify as Dependent Care FSA expenses?

No. Expenses for education do not qualify as Dependent Care FSA expenses. However, if you are charged for after care on a day that your child attends school, this charge does qualify as a Dependent Care FSA expense. Your provider must supply you with documentation for the charges for the portion of the day that is specifically for care and well-being.

What does “incurred” mean?

Incurred is defined by the IRS as the date(s) that the services are provided that gave rise to the expense. Expenses are not considered to be provided at the time you are billed. That means for Dependent Care FSAs, if you pay for services in advance, you cannot claim the expenses until you actually receive the services. For example, if you pay January’s expenses at the beginning of the month, you cannot be reimbursed until the end of January when all of the services have been received. You may file a claim weekly for that week’s services or you may file an Auto Dependent Care Claim Form if your weekly payments do not vary.

Do charges for food, transportation and activity fees qualify as Dependent Care expenses?

No. If your child’s child care center or summer camp charges for food, transportation or activities, these charges are not eligible as Dependent Care FSA expenses.

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