What is a Dependent care flexible spending account?
A Dependent care flexible spending account is an employer-sponsored benefit program allowing employees to contribute pre-tax dollars for qualifying dependent care expenses that enable work or job searching, with annual contribution limits of $5,000 for most filers. Eligible expenses include daycare centers, babysitters, summer day camps, before and after-school programs, and care for dependents under age 13 or those physically or mentally incapable of self-care. Contributions reduce both income and FICA taxes, creating savings typically exceeding $1,050 annually for families in the 22% tax bracket. Families must coordinate with the Child & dependent tax credits to maximize benefits without double-claiming expenses.
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