I have a question about eligibility for dependent care FSA. My daughter is 3 years old and she goes to a day care and I do have their receipts with EIN number. I have changed a job and my new company provides a flexible spending account for dependent care upto $5000.
But my wife doesn't work and she doesn't go to school either. I think I read somewhere that I can't claim FSA for dependent care if I am married and spouse doesn't work or not a student. Is it correct ?
-DC
You read it right. The point of the FSA (and its tax benefit) is to enable both parents to work, go to school, or seek work. Joe
Just one minor amplification regarding "seeking work" -- that is indeed one activity that helps qualify the day care for special tax treatment. But separately, each spouse must have actually *performed* some work (have some earned income) at some point during the year, which could come before or after the "seeking" activity.
Also, another detail: if you lived apart from your spouse the last six months of the year and you are the custodial parent, you could claim the credit (or use the tax-free FSA) without taking spouse's situation into account. This is typically the case when you pay the household costs and are filing as Head of Household even though still married.
-Mark Bole
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