Dependent Care FSA.
In plain English
It works like a medical FSA but for care expenses that let you (and your spouse) work or look for work. Daycare, summer day camp, and care for a disabled dependent typically qualify. Unlike the medical FSA, the money is only reimbursable as it's deposited, not all on day one.
01Why it matters
For a household already paying for daycare, it converts an unavoidable expense into pre-tax dollars, a discount the size of your tax rate.
02The math, step by step
A household electing the 2026 limit of $5,000 with a combined 22% federal rate plus FICA saves roughly $1,480 in tax on money they were going to spend on daycare anyway.
03What this is NOT
It is not the same pot as your medical FSA, and it is not the Child and Dependent Care Tax Credit. You generally can't use both on the same dollars.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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