Childcare or early education expenses can add up quickly in the U.S. However, with a flexible spending account (FSA), people can set aside income to save for childcare or healthcare expenses. The benefit comes in the form of regular paycheck deductions on a pre-tax basis. This can help families budget and sometimes can reduce taxes. About 63% of all employers in the U.S. offer an FSA. We talked with Oleysa Shkut, director of human resources at Pine Tree Legal Assistance, to learn more.

How can I find out if my employer offers an FSA program?
Employers typically provide information about all of their available employee benefits for new employees, and this includes the FSA. Since an important part of the job of the human resources (HR) staff of an organization is to make sure that employees understand their employee benefits, the best thing to do is to check with the HR team and request details about benefits. Knowing what benefits are available helps employees estimate the entire package in a job offer, and not just the salary. Many employers list their employee benefits on their company’s website or on an internal site for employees. Another option is to directly contact the customer service department of the FSA carrier or insurance broker that your organization works with.

If my employer doesn’t offer a FSA, do I have any other options?
Mainers should be aware of a special program called the Child Care Subsidy Program (CCSP) of the Maine Department of Health and Human Services. This program helps eligible families pay for child care so parents can work, go to school, or participate in a job training program. Depending on income, someone might be eligible for a generous stipend to help offset child care costs. Information is available by calling toll free (877) 680-5866 or emailing [email protected].

How much money can I put in my dependent care FSA?
This year only the federal government has increased 2021 dependent care FSA limits from $5,000 to $10,500 for married couples filing jointly. Taking advantage of this opportunity is still possible for this tax year, so speak with someone in the HR department.

What happens if I don’t spend all of the money?
This year only, funds can be carried over to 2022 under the American Rescue Plan. It is very important to submit claims in a timely manner, and this is primarily the employee’s responsibility.

How do I make changes?
In a typical year, changes can only be made to an FSA account during the company’s open enrollment period. The exception is if someone has a “qualifying life event,” which means a big change such as getting married, having a baby, or losing health coverage. However, because of the American Rescue Plan, this year changes can be made at any time.