Does an FSA cover daycare?
A regular health FSA can't pay for daycare, but a Dependent Care FSA is built exactly for it — covering childcare that lets you (and your spouse) work.
What flips the answer
- Covered when
You have a Dependent Care FSA and the daycare lets you (and your spouse) work or look for work, for a child under 13 or a disabled dependent.
- Not covered when
You only have a health care FSA — daycare is not a qualified medical expense.
- Not covered when
The care isn't work-related, is overnight camp, or is for a child who has turned 13.
The answer depends on which FSA you have. A health care FSA only covers qualified medical expenses, so it can't reimburse daycare. A Dependent Care FSA (DCFSA) is a separate account specifically for work-related care of a child under 13 or a disabled dependent.
Under IRS Publication 503, daycare qualifies for a DCFSA when the care lets you — and your spouse, if married — work or look for work. Licensed daycare centers, in-home care, and after-school care for a qualifying child all count.
The DCFSA has its own annual contribution limit set by the IRS, and the care must be for a qualifying person. Overnight camp, care while you're not working, and expenses for a child who has turned 13 don't qualify.
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