Dependent care FSA for spouse who works for part of the year

user17570167794 — Thu, 04 Sep 2025 20:21:45 GMT

My wife and I transitioned from a J visa to a H visa, and she is the primary visa holder H1B. The transition happened in July 2025, and I had to resign from my job as I switched to H4. In my wife's new job, she signed up for a Dependent Care FSA account, but we later realized that both spouses must be employed to take advantage of the credit. Sadly, they are going to deduct 625$ per pay period (4 x 2 pay periods left in the FY = 5000 usd), to reach the 5000 cap. We unsuccessfully tried to get this amount changed (as we went past the enrollment window). I have earned income from January to July, but since the FSA enrollment was in September, can I reimburse daycare expenses from Sep - Dec 2025 from the FSA administrator ? The FSA administrator requires us to file claims for reimbursement.

Without reimbursement, the current benefit election will cause my wife to lose all $5000 that will be in the FSA. Since I am on H4, I am not allowed to "look for work" until I get my EAD. What can I do to reduce the amount I will forfeit ? Since my job loss was in July, the benefits administrator is unwilling to use it as a Qualifying Life Event to reduce payroll contributions to the FSA.

Asking because I am receiving conflicting information. Some sources say that earned income test is month-to-month and since I don't have earned income from Sep-Dec, we cannot claim the credit. Other sources say that it is a yearly test, and since I have earned income, we do qualify for reimbursement. What I am basically looking for is the following: Am I allowed to claim the credit from daycare expenses ? If not, can I get it reimbursed from FSA and then report it as taxable income on my next tax return ? Looking to minimize the amount of money that we will lose.

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Dependent care FSA for spouse who works for part of the year