Dependent Care Flexible Spending Account (DCFSA)

The dependent care flexible spending account (DCFSA) reimburses dependent care expenses necessary while you (and your spouse, if you're married) are attending school on a full-time basis or working. Typically, these would be day care expenses for children age 12 and under, but you can also use this account to reimburse care for dependents who are physically or mentally unable to care for themselves, such as spouses, parents, or grandparents.  Your dependent must live in your home at least eight hours a day.

Eligible expenses include care provided in a day care facility or in the home*, and may include nursey school, pre-school, and before- and after-school care for children in kindergarten and higher.

*For care in the home, the provider cannot be the DCFSA participant’s child who is under 19 or anyone that the DCFSA participant can claim as a tax dependent.

You may incur eligible expenses at any time between the opening of your DCFSA and 12/31 of that plan year or the date of your termination or loss of benefits-eligibility. Claims for reimbursement must be submitted to HSA Bank no later than 3/31 of the following year or 90 days from the date of your termination or loss of benefits eligibility.  Any funds remaining in your account after that time will be forfeited.

IRS limitations on flexible spending accounts

  • Expenses reimbursed from an FSA cannot be claimed as part of the dependent care tax credit on your tax return.
  • Only expenses actually incurred during the eligibility period (opening of the account to 12/31 of that calendar year, termination date or loss of benefits eligibility) are eligible for reimbursement. Expenses incurred before or after the eligibility period are not eligible, regardless of when you paid for the expenses. FSAs may not  pay or reimburse for future or projected expenses.
  • If you do not use all the pre-tax dollars in your flexible spending account by the filing deadline, you forfeit the amount left over. That's an Internal Revenue Service requirement.

Special considerations for the dependent care FSA

By IRS rules, married individuals who file separate tax returns are limited to a $2,500 contribution annually. You may contribute up to $5,000 if you are married and file a joint tax return, provided both you and your spouse each earn more than $5,000 annually. If one of you earns less than $5,000 during the year, you are limited to a maximum spending account contribution equal to the salary of the lowest-earning spouse.

Time spent by a student spouse in educational endeavors is considered working for the purposes of opening an FSA. Volunteer work does not qualify.

If both you and your spouse work, you must coordinate your dependent day care enrollments so that the two of you together stay within the $5,000 annual maximum.

You may only claim dependent care expenses on IRS-qualified tax dependents age 12 and younger, unless the dependent is disabled.

Changes to your Dependent Care Flexible Spending Account

Certain qualifying life events will allow you to add, drop, or change your DCFSA election in the middle of the year accordingly:

  • Significant change in cost (may change contribution amount)
  • Change in coverage

The need for care arises, such as returning to work after maternity leave (may enroll)

The need for care drops, such as a parent is now able to stay home with the dependent (may decline)

If you need to add, drop, or change your account due to one of these reasons, please contact hr@purdue.edu with the circumstance and your desired change no later than 30 days from the date of your qualifying event.

Important Deadlines

For 2019: Eligible 2019 DCFSA expenses may be incurred between Jan. 1, 2019 or date account is first opened through Dec. 31, 2019 or the last day benefits are in effect before a loss of coverage occurs (such as if you leave Purdue University). You have until 90 days from December 31 (March 30 in 2020) or 90 days from your termination or loss of benefits eligibility to submit your claims for reimbursement. Any funds remaining in your account after your applicable deadline will be forfeited, so it is important to estimate your expenses carefully.

For 2018: Eligible 2018 DCFSA expenses may be incurred between Jan. 1, 2018 or date account is first opened through Dec. 31, 2018 even if you terminate your account during the plan year such as with a change in family status or if you leave Purdue University. You have until 90 days from December 31 (March 31 in 2019) to submit your claims for reimbursement. Any funds remaining in your account after March 31, 2019, will be forfeited, so it is important to estimate your expenses carefully.

Claims process

HSA Bank processes all FSA claims for Purdue University for accounts opened on or after January 1, 2019. Your claims will be processed through one of the following methods.

  • Debit Card: Dependent Care FSA participants (for accounts opened 1/1/19 or after) receive a debit card that they may use at the place of service to pay for eligible expenses so long as the expenses are not for future dates. The card number may also be used when paying for eligible expenses that are billed to you. Most charges for medical services and prescriptions will be substantiated automatically. Retain your receipts in case HSA Bank asks you to provide substantiation for the charge or in case you are audited by the IRS.

If a debit card transaction is not auto-substantiated, you will receive a letter requesting additional documentation as proof of eligible expense.  You will have 45 days from the receipt of the letter to provide the substantiation via HSA Bank's website, mobile app, mail, or fax.  If you do not provide this documentation, the amount of your unsubstantiated charge(s) will be reported back to you as taxable income, in keeping with instructions from the IRS.

Debit cards may only be used for the current year’s FSA until December 31 (or 90 days from your termination or loss of benefits eligibility date).  You may continue to file claims for reimbursement until 90 days after December 31 (March 30 in 2020).

  • Reimbursement when debit card is not used: For claims that are not handled with the debt card, you may file your claim for reimbursement until 90 days from December 31 (March 30 in 2020) or 90 days from your termination or loss of benefits eligibility date.
    • HSA Bank (for accounts opened 1/1/19 or after)
      You have three ways to file your 2019 Dependent Care FSA Claims
      • Online
        • Website:Log in to HSA Bank and click "File A Claim" in the "I Want To..." section on the left side of the page.
        • Mobile App: Log into your account with the HSA Bank Mobile app and tap "Filea Claim".
      • Fax: 855-764-5689
      • Mail: HSA Bank, P.O. Box 2744, Fargo, ND 58108-2744
    • PayFlex (2018 Accounts)
      Three ways to file your 2018 Healthcare FSA Claims:
      • Online: Log into PayFlex and go to File a Claim under your Limited FSA snapshot in the Finanial Center - My Accounts box
      • Fax: 866-932-2567
      • Mail: PayFlex Systems USA, Inc., P.O. Box 981158, El Paso, TX, 79998-1158

Claim filing tips

Dependent care services must have been provided or received before you file a claim:

FSAs may not pay or reimburse for future or projected expenses.  This means in order to get reimbursed for dependent care expenses, the services need to have been provided or received when filing a claim. 

For example, if you pre-pay for a month of daycare services out-of-pocket, you cannot get reimbursed for your expenses until that month has passed/the dependent has received the services.  Similarly, if you pre-pay for a summer day camp, you cannot get reimbursed for your expenses until your dependent attends the camp.

If your FSA balance is more than the claim amount:

If your available balance is more than the amount of your claim, then the entire claim is marked for payment. If you have enrolled in direct deposit, the full amount of the claim will be deposited into your bank account.  Otherwise, a check will be issued to you.

If your FSA balance is less than the claim amount:

If your available balance is less than the amount of your claim, you will only be reimbursed for the amount that is available in your dependent day care account. However, when the next contribution is made to the your dependent care flexible spending account, you will then be reimbursed for the remainder of the claim as allowed, up to the amount of the deposit. This process automatically continues until the entire claim has been paid or until the annual election amount has been met.


Resources

hsabank

HSA Bank Customer Service
1-800-357-6246
askus@hsabank.com

HSA Bank website

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