Hellobee Boards

I use my dependent care FSA via work. The amount comes out of my paycheck and HAS to be split evenly between all 26 checks... which is a PITA since it's not enough to cover the full year of daycare. I think the max is $5000/yr.

Last year my son was in a childcare center and my FSA had a credit card that I used to pay the center directly. The funds came straight from my account. Since my account wasn't accumulating as fast as the actual bill was, (see note above about slitting 5000 evenly by 26 weeks) I couldn't set it up for automatic payment... I'd alternate paying by check 1 week and using the card another week. At the end of the year there was some money left in the account and I submitted to be reimbursed for some of the checks I wrote.

This year we have a nanny. So I pay the nanny with checks and plan to submit for reimbursement every 3 months. In order to use the FSA for a nanny you have to be legit and pay taxes and such for the nanny as she is a household employee.

Hope that is helpful!

@mediagirl: are you asking about claiming the prepaid FSA Dependent care on your tax return? I think you can only claim for services that were provided in the tax year you are filing:

IRS website says this: "Expenses prepaid in an earlier year. If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. Claim the expenses for the later year as if they were actually paid in that later year. "