Divorced and alternating years for taking the Dependent Care FSA

Forum|Forum|6 years ago
February 14, 2020
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The IRS states that only the custodial parent (the parent with more nights with child) can take the Dependent Care FSA deduction of $5000 per year.

Here's my problem scenario - If in 2020 I am the custodial parent and I sign up for the Dependent Care FSA deduction for my employer's plan year (July 1st 2020 - June 30th 2021) the deduction will span 2 tax years. My ex will be the custodial parent in 2021 and wants to sign up for the Depende Care FSA deduction of $5000 as well. His employer's plan year is Jan 1st 2021 - Dec 31 2021. If we were to do this then we are Both getting the deduction between Jan 1st 2021 and June 30th 2021. Would this be allowed if we are not claiming the same expenses ??

@dependents

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Best answer by ColeenD3

No. If you have Dependent Care Benefits in Box 10 from your FSA and you are not the custodial parent for that year, then that will be considered income. It does not make sense to have the FSA for a time period when you can't apply the funds to Form 2441 because you are not the custodial parent.

[Edited 2/14/2020|1:44 EST]

ColeenD3Answer

No. If you have Dependent Care Benefits in Box 10 from your FSA and you are not the custodial parent for that year, then that will be considered income. It does not make sense to have the FSA for a time period when you can't apply the funds to Form 2441 because you are not the custodial parent.

[Edited 2/14/2020|1:44 EST]