Child day care expenses that qualify must allow
you and your spouse, if you are married, to work
or look for work:
  • Nanny, babysitter, housekeeper and nurse's fees
     thru age 12, for services provided inside your
     home, are eligible to the extent they are
     attributable to the child
  • Dependent care expenses incurred for services
     outside your home, providing they are incurred for
     the care of a qualifying dependent that regularly
     spends at least 8 hours per day in your home
  • Registration fees to a day care facility are eligible
     as long as the fees are allocable to actual care and
     not described as materials or other fees
  • Pre-K or nursery school expenses are eligible
     even if the school also furnishes lunch and
     educational services
  • Before and after school care thru age 12
  • Day camp expenses thru age 12 are eligible if
     the day camp's main purpose is the dependent
     child's well-being and protection
  • Food and incidental expenses (diapers, activities,
     etc.)  may be eligible if part of dependent care
     charge
  • Expenses paid to a relative (e.g. child, parent, or
     grandparent or participant) are eligible. However,
     the relative cannot be under age 19 or a tax
     dependent of the participant
  • FICA and FUTA payroll taxes of the day care
     provider

For additional information CLICK HERE to view
IRS Publication 503.

Child dependent care expenses that DO NOT qualify:
  • Kindergarten fees are almost always an education
     expense and should never be reimbursed under a
     dependent care plan
  • Elementary school expenses for a child in first
     grade or higher
  • Overnight camp
  • Food, transportation, and incidental expenses
    (diapers, activities, etc.) are not eligible if
     charged separately from dependent care expenses
  • Expenses paid to a housekeeper, maid, cook, etc. are
     not eligible, except where incidental to child care
  • Mass transit and parking

How does this plan compare to the credit on my Form 1040?
Whether or not to participate in the Dependent Care Benefit (DCB) or to take the tax credit when you file your taxes depends on your income, filing status, number of dependents, and annual day care expenses. Use our easy calculator to determine your savings.

Limitations: Child dependent care expenses may not exceed the smaller of the following limits:
  • The maximum allowed under the plan
  • $5,000 (if you are married and filing a joint tax return
     or are filing as single, head of household) and $2,500
     if you are married and separate returns are filed
  • Your taxable compensation (after all compensation
     reduction elections). If you are married, your spouse's
     actual or deemed earned income
  • Eligible expenses include day care costs for
    dependent children under the age of 13, or a child who
     is physically or mentally incapable of self-care
 • The child must spend at least 8 hours a day in
    our household