Dependent Care 101

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DO YOU HAVE A CHILD UNDER THE AGE OF 13?
LEARN ABOUT FSA DEPENDENT CARE

A Dependent Care FSA allows you to use pretax dollars to pay for eligible expenses related to care for your child, disabled spouse, elderly parent or other dependent who is mentally or physically incapable of self-care, so you can work, look for work or attend school full time. When you utilize a Dependent Care FSA, you may save up to 30% in your combined Federal, State and local taxes.

Dependent care expense reimbursement provided during the calendar year cannot exceed $5,000. In the case of a separate return by a married individual, the limit is $2,500.

What Is Covered as an Approved Expense?

Child Care Definitions: Child Care, or Dependent Care includes the following:

  • Fees for licensed day care or adult day care services
  • Before and after school care programs for dependents under the age of 13
  • Amounts paid for services (including babysitters or nursery school) provided inside or outside your home
  • Nanny expenses attributed to dependent care
  • Nursery school/Preschool fees
  • Summer Day Camp – primary purpose must be custodial care, and not educational in nature
  • Late pick-up fees

How It Works:

There are several ways you can get reimbursed for your Dependent Care expenses.

  • If you have the Sterling mobile app, you may submit receipts for dependent care expenses by simply uploading the image of the receipt to the app and following the prompts.
  • You may also submit receipts online through your desktop computer at Sterling’s online portal at www.sterlingadministration.com.
  • You may also call Sterling’s Customer Service to set up automatic payment to the provider
  • You may call Sterling’s Customer Service to arrange to get reimbursed automatically via direct deposit
  • You will need to provide Sterling the Federal tax ID of the provider. This is usually found on invoices from the care provider, daycare or school.

For more information on FSA Dependent Care and the rules governing it, refer to IRS Publication 503.