Family Caregivers Month
Every November, National Family Caregivers Month honors the millions of family caregivers across the country who care for loved ones. These caregivers provide support to children, seniors, individuals with disabilities or those with chronic conditions to maintain a quality of life. For caregivers, balancing these responsibilities with their own work and personal lives can be a significant challenge. While caregivers provide essential care and support, they are often faced with financial burdens that come with their role. This is where Flexible Spending Accounts (FSAs) can be a crucial benefit for family caregivers, specifically, Dependent Care Flexible Spending Accounts (DCFSAs).
What is a DCFSA?
DCFSAs are employer-provided, tax-free accounts designed to help employees save money for dependent care expenses.
Many people associate FSAs with personal healthcare expenses, but they can also provide essential financial relief for dependent care. DCFSAs provide tax-preferred options for managing care for child and dependent adults who are unable to care for themselves.
How Dependent Care FSAs can benefit family caregivers
Tax savings. DCFSAs enable caregivers to use pre-tax income to pay for expenses related to the care of qualified dependents. These accounts allow you to save up to $5,000 per year per household ($2,500 if married and filing separately). The money contributed to the DCFSA is not subject to federal income tax or Social Security tax. This can reduce your taxable income and provide financial relief.
Helps pay for dependent care expenses. A DCFSA can be used to cover eligible care expenses for dependents. This includes daycare or after school care, in-home care providers, adult daycare centers or senior daycare programs. Using pre-tax dollars for these services, families can reduce their out-of-pocket costs for necessary dependent care.
Can be used for multiple dependents. A single DCFSA can be used to cover expenses for more than one dependent. Whether an individual is caring for young children, an elderly parent, or a disabled family member, a DCFSA can help offset the costs of providing care to all eligible dependents under the same account.
Convenience. The funds are contributed gradually through payroll deductions. This offers peace of mind, knowing that money has already been set aside for expected expenses.
Supports work-life balance. For working caregivers, DCFSAs provide critical support by covering care for dependents while they are at work. This helps ensure that caregivers can continue working without compromising their career to meet caregiving responsibilities and that dependents receive the necessary care while the caregiver is away.
As we observe National Family Caregivers Month, we recognize the valuable contributions of caregivers across the country. If you’re a family caregiver or know someone who is, this month is a great time to explore how a DCFSA could help you and your family.