@michiganner wrote:
Thanks for your answer.
I have a specific question: Due to the COVID-19, I keep my son at home from daycare. My wife was unemployed since March of this year and she stay at home taking care of our child. I have some money of dependent care FSA in my account. I am wondering if I can pay my wife with the FSA money?
No, you can never pay the parent of the child as a caregiver.
Additionally, care is only qualified if it is provided so that you and your spouse can work or look for work. So your use of the FSA in that way would be doubly improper.
The IRS released a modified rule back in March or April that would allow employees to stop their FSA deposits in mid-year (which is normally not allowed). If you did not stop your deposits, I'm sorry that was a missed opportunity. Your employer should have notified you of the option. If you did stop your deposits and you are still stuck with a balance, I'm afraid you are stuck. The IRS guidance also allows that if your plan ends before Dec 31, 2020 (some plans have different fiscal years), you can spend your balance for qualified care up to 12/31/2020. But your wife would have to go back to work before the expenses would be qualified.
Any relief for money stuck in dependent care accounts would have to come from Congress.
