Publication Date
1-2019
Publisher
Social Policy Institute at Washington University in St. Louis
Summary
Dependent Care Flexible Spending Accounts (DCFSAs) can help workers save money on child care expenses by using pre-tax dollars, but few employees actually use the accounts, particularly low- to moderate-income (LMI) employees, because:
• DCFSAs are difficult to understand; figuring out if they are possible to use and worth the trouble is a complex task for families.
• Families face a “double-hit” if they use the accounts – they have to set aside pre-tax dollars for child care expenses and then pay out-of-pocket before getting reimbursed.
• Using a DCFSA may require certainty about a year’s worth of child care costs, with a possible penalty for over-estimating expenses (depending on each employers’ plan rules).
• DCFSAs can interact with tax credits, Medicaid, and federal/state poverty alleviation programs.
Document Type
Policy Highlights
Original Citation
Fox-Dichter, S., Frank-Miller, E., & Wolter, S. (2019). Making dependent care FSAs work for low- to moderate-income families: 5 action stepsfor policymakers [Policy Highlight No. 19-01]. St. Louis, MO: Washington University, Social Policy Institute
DOI:
https://doi.org/10.7936/yrzx-ye11
Project
Workforce Financial Stability Initiative (WFSI)
Recommended Citation
Fox-Dichter, S., Frank-Miller, E., & Wolter, S. (2019). Making dependent care FSAs work for low- to moderate-income families: 5 action stepsfor policymakers [Policy Highlight No. 19-01]. St. Louis, MO: Washington University, Social Policy Institute
Included in
Economic Policy Commons, Education Policy Commons, Health Policy Commons, Public Policy Commons
Notes
Permanent URL: https://doi.org/10.7936/yrzx-ye11