Hi All, I have a question around my wife's DCFSA. My wife's parent's (so children's grandparents) watched our children over the summer for about a month, for which we paid them around $1,000. They were doing us a favor as we both work. We did not think about getting reimbursed at the time through her DCFSA because we thought for sure daycare facilities would be back open for the fall and we would just reimburse then. Well, surprise surprise, that did not occur and we now have close to $1,500 in our DCFSA. Are we able to reimburse ourselves for paying them to watch our children? They are not normally caregivers so they don't have a business set-up.
If we are able to, what do we need? An invoice from them? I know they would need to add it to their tax return, but what if they make so little that they don't even need to file a return?
At the end of the day, I want to be able to access that money, as we had legitimate expenses, but I want to make sure we are doing everything legally and to the tax code. Any advice would be greatly appreciated.
