COVID-19 Triggers Enrollment and Election Changes for Dependent Care Flexible Spending Accounts (FSAs)
If you didn’t enroll in a Dependent Care Flexible Spending Account (FSA) for 2020, or need to make changes to your election amount, now is the time to do it as COVID-19 may enable you to make these changes! Because many families are experiencing changes to their child care or elder care situations, this tax savings opportunity could make a significant financial impact ($1,500+). Here are some examples that qualify as a life event change for your Dependent Care FSA election under COVID-19:
Example 1: You and your spouse are now both working from home, and your children are not in school due to school closures. You need a nanny to watch over your children so you can work.
Example 2: The grandparents used to watch over your children, but right now you need a nanny to step in because your parents are elderly and at risk with the COVID-19, and they need to stay in their own home.
You can learn more about Dependent Care FSAs here. If you are eligible, you usually have 30 days from the time of the event to make the change. Contact your employer to understand your options and how to enroll.
People who have been paying their household employees on the books are in a much better position during this COVID-19 crisis than people who have not been. If you know anyone who hasn’t been paying legally, and they regret it, let them know that Nest Payroll will catch them up on 2019 taxes for free. You can forward them this article: Now Is the Time to Get Your Household Employees On the Books.