Written by: Kristen Jowers, MS, & Nichole Huff, PhD
What is the DCFSA?
A dependent care flexible spending account (DCFSA) lets service members set aside pre-tax dollars from their paychecks to cover eligible dependent care expenses, including daycare, preschool, after-school care, summer day camp, and elder care.
How does it work?
While funds are deposited into the account, actual expenses must be paid upfront by the service member, who then submits paperwork to be reimbursed for eligible dependent care expenses. Dependent care expenses must be related to work; for example, putting a child in daycare while the service member or spouse works. A DCFSA does not cover babysitting expenses for a child to be in care for non-work-related needs or recreation (e.g., date night). Funds deposited into the account are “use it or lose it.” Funds expire at the end of a designated time period. Because of this expiration risk, inform service members and spouses that if they won’t submit the required paperwork to claim reimbursement, they should not use the DCFSA.
Eligibility
You can help service members determine their eligibility for a DCFSA, which is available as a benefit for: (1) regular (active) component service members, (2) Active Guard Reserve members, (3) members of the National Guard performing AGR duty, (4) eligible U.S. Coast Guard Reserve members, including Reserve Component Managers, performing active duty for more than 180 days, and (5) eligible federal civilian employees. There is no income limit for qualifying to open a DCFSA. The service member must have qualifying dependent care expenses, and the dependents must be under the age of 13 and claimed as a dependent on the service member’s tax return. Some dependents over the age of 13 may be eligible if they are physically or mentally incapable of self-care.
Contribution Limits
Each household can contribute from $100 to $7,500 per year*. In order to qualify, both spouses must have earned income or be a full-time student for at least five months of the tax year. For families where both parents may have access to a flexible spending account through their employer, there is a maximum amount of $7,500 per household that can be set aside per family before taxes (not per child or per working parent). Married couples who intend to file taxes separately can set aside up to $3,750. *Contributions are subject to IRS limits, which vary by tax year. Listed numbers are current for 2026 and 2027.
Open Season
Service members may come to you with questions about how and when to enroll. Service members can sign up for a FSA during the Federal Benefits Open Season, which runs from November 9, 2026 through December 14, 2026, or when experiencing a qualifying life event. To enroll, direct service members to the FSAFEDS web page: https://fsafeds.com/.
To learn more about both dependent and health care flexible spending accounts, including contribution limits, managing accounts, and reimbursements, check out the OneOp webinar, Flexible Spending Accounts: Tools For Service Members.
Resources
FSAFEDS. (n.d.) Dependent Care FSA. https://www.fsafeds.gov/explore/dcfsa
Military OneSource. (n.d.). Dependent Care Flexible Spending Account. https://www.militaryonesource.mil/benefits/dependent-fsa/
Office of Military Compensation and Financial Readiness. (n.d.). Understanding the Dependent Care Flexible Spending Account Benefit. https://finred.usalearning.gov/Benefits/DCFSA
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