Money Monday: Understanding flexible spending accounts (FSAs)

Submit receipts for dependent care expenses, get reimbursed from your account

Here's what you need to know about flexible spending accounts. Learn more here:

Flexible spending accounts (FSAs) allow you -- if you’re employed -- to set aside pre-tax dollars to pay for qualifying medical or dependent care expenses such as daycare or elder care.

You submit receipts for the care and you get reimbursed from your account. We’ve talked a lot previously about the medical accounts, but today we’re looking at the dependent care part.

First, this program goes by several different names: The dependent care assistance program, or dependent care reimbursement accounts. It covers your children 13 and under and/or dependents of any age physically unable to care for themselves who you declare on your taxes.

They’ve upped the amount you can set aside for 2022. The individual contribution is $3,650. Family coverage is $7,300.

If you are married, your spouse must also either work or go to full-time school five months of the year.

Law changes made during the COVID pandemic allowed you to avoid the “use it or lose it” rules.

You can spend unused 2021 contributions by April 15 of next year.

That benefit goes away if you’re planning on using this in 2022.

Further reading:

More: Money Monday section

About the Author:

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Planner™ Professional.