How exactly does the FSA for child care work?

RevJG

I understand that I can contribute up to $5,000 a year pre-tax for child care expenses.  But, exactly how does it work?  How do I use that money to pay my child care provider? (ie, when they take it out of my paycheck, where does it go?)

Thanks for answering what is probably my very dumb question! 

RevJG

Thanks, that's very helpful.

2bearichards

Ours is different.  We pay and then submit our receipts from the daycare at the end of the year and then get reimbursed up to 5K.

Meg_Meg

MrsJulieT:

It goes into a FSA account to which you will get a debit card that is attached to that account. You have to pay your provider via debit/credit card from my understanding. I'm not sure if you can get checks attached to the FSA or not. I know it was going to cause issues with us when we thought Ryan was going to day care as the provider wanted to be paid weekly. I'm sure someone will have a more definitive answer for you.

Ours is different.  The money goes into an account, but I'll have to pay out of pocket and them submit 'claims' to be reimbursed.  The downside that a lot of people complain about is that if you're not using a true Day Care Center - you aren't getting invoices to submit.

prnczmel

Ours is like Rachel's, but we can submit a receipt or a signed form from the DCP and claim money before we reach the $5,000 at the end of the year.

Venessa

Ours works like pps said pay out-of-pocket first, submit claim, then get reimbursed.

We do monthly claims. If you do it this way, keep in mind you don't get the full reimubursement the following month... unless you have the full amount in your account. It's unlike medical reimbursement, where they'll reimburse you for the full claim even if you don't have the full claim amount in you account.

We found this out after we submitted a claim for childcare but only received a partial refund. The checks do keep coming in as the money is deposited into your account.

HTH