A dependent-care flexible spending account (DCFSA) allows you to set aside pre-tax dollars to pay for eligible childcare, after-school programs, preschool, or eldercare expenses required to enable both you and your spouse to remain gainfully employed.
The statutory contribution limit is $7,500 per household in 2026 (established under the OBBBA, raised from the legacy $5,000 cap). If you are married, your contribution is capped at the lesser of your earned income or your spouse’s earned income. Highly compensated employees frequently face lower caps due to strict non-discrimination testing.
Unlike MedFSAs, DCFSAs are not subject to the Uniform Coverage Rule. You can only be reimbursed up to the amount currently settled in the account through your bi-weekly paycheck deductions. Furthermore, DCFSAs have a strict use-it-or-lose-it rule with zero rollover capability; any unused funds at the end of the plan year (or grace period) are permanently forfeited. Consult IRS Pub. 503, “Child and Dependent Care Expenses” for eligible dependent tests.