Samantha Meyer paints with a child in the Denali Child Development Center at Joint Base Elmendorf-Richardson, Alaska, Oct. 20, 2023. Military families have until Dec. 11 to enroll in a new program that allows them to set aside up to $5,000 tax-free for child care and other dependent care programs. (J. Michael Pena/U.S. Air Force)
Military families have until Dec. 11 to enroll in a new program that helps offset child care costs and other dependent care through tax savings.
Service members must set up a Dependent Care Flexible Spending Account during the federal benefits open season, which began Monday.
The account allows households to set aside up to $5,000 in pretax income for dependent care. A service member in the 22% tax bracket could save up to $1,100 a year with a deduction of $192.31 per pay period.
The Defense Department announced in March that the flexible spending account would be expanded to military personnel no later than Jan. 1. While the U.S. military subsidizes on-base child care, most base child care centers have waiting lists, forcing families to seek care elsewhere.
The U.S. Office of Personnel Management manages the program, which is already available to federal civilian employees.
The program is open to active-duty service members and Active Guard Reserve members on Title 10 orders who pay child care costs for kids under 13, and those who care for a spouse or relative of any age unable to look after themselves. Service members and spouses must require the care to work, look for work or attend school full-time.
The IRS determines which expenses can be reimbursed. The list includes after-school programs, an au pair, babysitting by a relative not claimed as a dependent, before or after school programs, child care, day camp and adult day care.
After enrollment, funds are withdrawn automatically from each paycheck for deposit into the flexible spending account. The balance may be used to pay for eligible expenses through direct deposit or through reimbursement. Funds cannot be carried over to the next year and will be lost if not spent during the benefit period.
To enroll, go to: https://www.fsafeds.com.
