How Families Can Use Their FSA to Cover Nanny Agency Fees
Navigating childcare expenses can be challenging, but did you know that some of your nanny agency fees may be reimbursable through a Flexible Spending Account (FSA)? Here’s what families need to know to make the process as smooth as possible.
What Is an FSA?
A Flexible Spending Account (FSA) is an employer-sponsored benefit that lets you set aside pre-tax dollars to pay for eligible healthcare and dependent care expenses. Using an FSA can help families save money while paying for childcare-related costs, including certain nanny services.
Which Fees Are Eligible?
For nanny agencies, fees may qualify for FSA reimbursement if they are tied to the care of your child, not just placement or administrative services. Typically, dependent care FSAs cover expenses that allow you (and your spouse, if applicable) to work, look for work, or attend school full-time.
Eligible expenses may include:
Onboarding or placement fees for a nanny who will provide care for a qualifying dependent
Background check and screening costs associated with hiring a nanny
Ongoing childcare services provided by your nanny
It’s important to note that every FSA administrator may have slightly different rules, so checking with your plan is crucial.
Steps to Submit for Reimbursement
Check Your FSA Plan: Confirm with your FSA administrator that nanny or dependent care fees are eligible. Ask if placement fees, registration, or ongoing nanny services are reimbursable.
Collect Documentation: Keep invoices, receipts, and contracts from your nanny agency. Make sure the documents clearly show what the fee covers.
Submit a Claim: Fill out your FSA claim form, attach the required documentation, and submit it to your administrator. Some administrators allow online submission, while others may require paper forms.
Follow Up: If your claim is denied, reach out to your FSA administrator. You may be able to provide additional documentation or clarify the expense.
Tips for Families
Keep all invoices itemized and detailed. This makes it easier for your FSA administrator to approve your claim.
Remember that the expense must be for a dependent under the age of 13 or a dependent who is unable to care for themselves, according to IRS rules.
Plan ahead: some FSAs have deadlines for submissions, so make sure you submit claims in a timely manner.
By leveraging your FSA, families can save money while investing in high-quality, reliable childcare through a professional nanny agency. If you have questions about how our agency fees might qualify for reimbursement, feel free to reach out — we’re happy to guide you through the process!
