What Is a Dependent Care FSA?

A Dependent Care FSA lets you use pre-tax dollars — up to $5,000 per year ($2,500 if married filing separately) — to pay for childcare or care for a dependent who can't care for themselves. Eligible expenses include daycare, after-school programs, and summer day camps (but not overnight camps). You must use the funds within the plan year (check your employer's rules). If you also plan to claim the Child and Dependent Care Credit, the FSA reduces the expenses eligible for the credit. The FSA is usually the better deal for people in higher tax brackets.