Does a Dependent Care FSA cover preschool?
Preschool and nursery-school costs qualify for a Dependent Care FSA because the IRS treats them as childcare, but kindergarten and above are considered education and don't count.
What flips the answer
- Covered when
The program is preschool or nursery school (below kindergarten) and lets you and your spouse work or look for work.
- Not covered when
The expense is kindergarten tuition or above — the IRS treats that as education, not care.
- Not covered when
The care isn't work-related, or the child is 13 or older and not disabled.
IRS Publication 503 treats the cost of preschool and nursery school as care for a qualifying child, since programs below kindergarten are custodial rather than educational. If the preschool lets you (and your spouse) work or look for work, those costs are reimbursable from a Dependent Care FSA.
The bright line is kindergarten. Once a child reaches kindergarten, the IRS considers the expense education rather than care, so tuition at that level and above doesn't qualify — even if it's at the same school.
Before- and after-school care tied to a preschool program can still qualify as work-related care. The child must be under 13 (or a disabled dependent), and the expense has to enable you to work.
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