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Is my dependent who turned age 13 in plan year 2021 considered a qualified dependent under my Dependent Care FSA?
No. This temporary amendment only allows employees who were enrolled in a Dependent Care FSA for plan year 2020 by January 31, 2020 to use their unspent 2020 balance towards eligible expenses for dependents who turned age 13 during plan year 2020. Only then can unspent 2020 funds be used for that dependent, up until they turn age 14.
Below are two examples of how this amended rule applies:
- Plan year 2020 Dependent Care FSA enrollee (who enrolled by January 31, 2020) has a dependent who turned age 13 on June 10, 2020. The employee can use their plan year 2020 balance for any eligible expenses for that dependent for plan year 2020 as well as through June 9, 2021. Effective June 10, 2021, that dependent is no longer eligible since they turn age 14 on that date.
- Plan year 2020 Dependent Care FSA enrollee (who enrolled by January 31, 2020) has a dependent who turned age 12 during plan year 2020 and will turn age 13 on September 2, 2021. The employee cannot use their plan year 2020 balance for expenses incurred for that dependent beginning September 2, 2021 because that child did not turn age 13 during plan year 2020.