Real Money: Elder care and your DCFSA

As a parent, I'm always looking for the best ways to save money on child care — I talk to a lot of moms about this too. And if you're a parent, you may already know that a dependent care FSA or a DCFSA is a great way to save costs on child care expenses.

But did you know it could help aging dependents as well? As my parents get older, I can't help but wonder what would happen if they needed help. If you're in the same position, you should consider the DCFSA and whether or not you can save on costs by using pre-tax funds.

How does it work?

In order to claim reimbursement for qualified expenses for a DCFSA, you'll need a qualifying dependent. That means your elder dependent needs to live with you for a minimum of eight hours a day and be incapable of self-care. You'll also need to claim them as a dependent on your tax return.

Any expenses you wish to claim need to be related to caring for your dependent — these services are what allow you to attend school, work or actively look for work full-time.

As for how much you can contribute, it depends on how you file your taxes. If you're single or filing separately from your spouse, each of you can contribute up to $2,500. Those filing jointly can contribute up to $5,000, assuming each of you earn more than that amount each year.

If it's less, then you're limited to contributing to your DCFSA equal to the lowest earning spouse. For example, if you earn $10,000 a year but your spouse earns $4,000, then your DCFSA limit for the year can only be as much as $4,000.

Some qualifying life events will allow you the opportunity to change your DCFSA, such as changes in health care coverage, or if you suddenly need or no longer need elder care. It's best to contact your DCFSA provider if you're wondering about changes to your plan.

What counts as a qualifying expense?

According to the IRS, qualifying expenses are generally services that are primarily for the care and well-being on your dependent, whether it's in our out of your home. Qualifying care for your dependent must be to allow you and your spouse to work, go to school full time or to actively look for work. Medical expenses do not count as expenses for the DCFSA..

Some qualifying expenses include:

  • Adult day care center
  • Custodial elder care
  • Day nursing care
  • Elder care — in or outside the home
  • Transportation to and from eligible care — provided by the care provider
  • Registration fees required for eligible care

Remember you'll need to claim each of these expenses individually and provide proof of services. This may include medical documentation, receipts and other types of records — ask your DCFSA provider what's needed. It's better to have too much documentation rather than not enough. You don't want to be in a position where you can't claim your expenses.

Use your funds

Don't forget that you need you use up your DCFSA funds before the year ends or you forfeit the amount contributed. Your account may offer a grace period so you can spend down your funds, but that's not always the case. The best bet is to budget carefully for your elder care needs and check with your DCFSA provider on their specific rules and requirements.


Whether you budget week-to-week, or plan to use your FSA for bigger things, our Real Money column will help you maximize your flex spending dollars. Look for it on Tuesdays, exclusively on the Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.

Photo by Alex Pasarelu on Unsplash

Flex-Ed: How FSAs can benefit new moms

This one's for the moms who just got started, navigating life with a newborn and all a new child entails – sleeping, soothing, and feeding their brand-new family member.

Do you know how much breastfeeding costs? It's free, right? Well, not so fast.

While breastfeeding may allow you to save on formula, the costs associated with breastfeeding are many, from breast pads to nipple guards to nursing bras, just to name a few. You may even opt to purchase a breast pump, which is usually covered by insurance (but not necessarily the model you want).

But there are some little-known breastfeeding-related items that are eligible for flexible spending account (FSA) reimbursement, giving new moms the opportunity to save big. Here are a few of the breastfeeding necessities covered by your FSA (with some notes on which ones aren't).

Prenatal vitamins – The name may imply otherwise, but prenatal vitamins are still recommended for breastfeeding women. Good news: prenatal vitamins and glucosamine are two of the only vitamin types approved for FSAs.

Breast pumps – While your insurance will likely cover a bulk of the cost, you may be left with a remaining balance, especially if you choose a nicer model, like one that comes in a nondescript bag for toting to and from work. But you're in luck -- the IRS lists breast pumps as a qualifying medical expense.

Storage bottles – Yes, you still need bottles when you breastfeed. Here's why: Many pumps require a bottle to catch the expressed milk from pumping. Also worth noting is most mothers pump at some point if they plan to return to work or spend more than a few hours away from baby. One thing to keep in mind -- storage bottles are FSA-eligible, but bottles used just for feeding are usually not. Be sure to check with your administrator if you have any questions.

Extra pump parts – Because no two people are the same, standard breast shields that come with your breast pump may not fit correctly. This means you'll have to purchase a smaller or larger shield. Yes, they make them in different sizes, and no, they aren't cheap. You may also need to replace some of the pump's other parts, like the membranes or tubing. But you're in luck. According to the IRS, supplies that assist lactation, such as pump replacement parts, are also covered.

Milk storage bags – A must-have for the breastfeeding mom if she plans to pump or be away from her baby for any longer period of time.

Disposable nursing pads/ nipple shields – No one likes a leaker. So, it's a good thing breast pads are FSA-eligible. Trust me, you'll need them. Nipple shields fall under the supplies that aid in lactation category, making them a qualifying expense.

Support pillows – Breastfeeding pillows (like the Boppy) are not FSA-eligible, though most moms say they're must-haves. That said, an orthopedic neck support pillow might be comforting for new moms during some of those late nights and early mornings.

Nursing bras, tops, covers, or other apparel – Bad news. Nursing bras, shirts, and other apparel are not qualifying expenses for your FSA. (The exception? The hands-free bras used for pumping, though it's not designed for use as an everyday bra.) So, wait for sales, because those bras are expensive.

Now if only your FSA could pay for a night nurse. But, with any luck the above list will save you some money through tax-free spending, freeing up some cash to pay for those other child-related expenses. You know ... like college.

Prenatal Vitamins

Get everything you need to support your little one with prenatal vitamins.

Breast Pumps

Pumping made easy for moms everywhere. Choose from electric or manual for a personalized pumping experience.

Nursing Pads

Absorbent, ultra-soft nursing pads help keep nursing pain at bay while preventing leakage.

Breast Pump Accessories

From milk storage to pump cleaner, FSA-eligible breast pump accessories are guaranteed to keep mommy (and baby) happy.