​For the 2025 tax year, the Dependent Care Flexible Spending Account (FSA) contribution limits remain unchanged from previous years:​

• $5,000 per year for individuals who are single, head of household, or married filing jointly.

• $2,500 per year for individuals who are married and file separately.​

These limits are set by the IRS and are not adjusted annually for inflation. ​

The IRS has increased the Flexible Spending Account (FSA) contribution limits for the Health Care Flexible Spending Account (HCFSA) and the Limited Expense Health Care FSA (LEX HCFSA). For 2025, participants may contribute up to an annual maximum of $3,300 for a HCFSA or LEX HCFSA.

Important Considerations:

• Highly Compensated Employees: If you earned $155,000 or more in 2024, your 2025 Dependent Care FSA contributions may be limited to $2,500, regardless of your filing status.

• Use-It-or-Lose-It Rule: Dependent Care FSAs are subject to the “use-it-or-lose-it” rule. This means that any unspent funds at the end of the plan year are forfeited, unless your employer offers a grace period or carryover option. ​

To maximize your tax savings and avoid forfeiting funds, it’s advisable to estimate your dependent care expenses carefully and consult with your employer’s benefits administrator or a tax professional.

Also Read : SASSA Payment Dates For 2025 To 2026

How long can I use dependent care FSA?

The Dependent Care Flexible Spending Account (FSA) funds are generally subject to specific time limitations on when they can be used. Here are the key rules and timelines:

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1. Plan Year

• Typical Use Period: Dependent Care FSA funds must be used for eligible expenses incurred within the plan year (usually January 1 to December 31).

• Expenses incurred outside the plan year are not eligible for reimbursement.

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2. Grace Period (if offered)

• Some employers provide a grace period of up to 2.5 months after the plan year ends (e.g., until March 15 of the following year).

• You can use this period to incur additional eligible expenses and spend any remaining funds from the prior plan year.

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3. Claim Submission Deadline

• Employers may set a deadline for submitting claims for reimbursement, often referred to as the run-out period.

• This is typically 60–90 days after the plan year ends or the grace period expires (e.g., March 31 or April 15).

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4. “Use-It-or-Lose-It” Rule

• Dependent Care FSAs operate under a use-it-or-lose-it policy.

• Any unused funds after the plan year, grace period, or claim submission deadline are forfeited.

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5. Employment Termination

• If your employment ends, you can only use Dependent Care FSA funds for expenses incurred before your termination date unless you elect COBRA continuation (if offered).

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6. Age Limits for Dependents

• Funds can be used for dependents under age 13 or a dependent of any age who is physically or mentally incapable of self-care.

• If your child turns 13 during the year, you can only use the FSA for expenses incurred before their 13th birthday (unless they qualify as a dependent for another reason).

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To ensure you maximize your benefits, check with your employer or benefits administrator for details about your specific plan’s grace period and claim submission deadlines.