Families with Dependent Care FSAs Get Good News from the IRS

You'll still get a tax break if you carried over unused amounts from your dependent care flexible spending account from 2020 to 2021.

picture of nursery school teacher with preschool children
(Image credit: Getty Images)

Dependent care flexible spending accounts (FSAs) are a great way to save on childcare costs. If your employer offers one of these plans, you can contribute to the FSA on a tax-free basis and then use the funds to pay for dependent-care expenses during the year if the care is needed so that you can work. And they're not just available for childcare expenses – FSA funds can also be used to pay for the care of elderly parents or disabled adults (including your spouse) living with you who are physically or mentally incapable of providing their own care.

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Rocky Mengle

Rocky Mengle was a Senior Tax Editor for Kiplinger from October 2018 to January 2023 with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, Rocky worked for Wolters Kluwer Tax & Accounting, and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. in History from Salisbury University.