Dependent Care FSA - am I eligible to deduct preschool costs if my wife receives earned income for part time work on Saturday, even though I stay home and watch her

[ntgreat]

https://www.irs.gov/pub/irs-pdf/p503.pdf

Dependent Care Expenses is what I am referring to, discussed in the above link.  I have the option at work to contribute to a Dependent Care FSA, but I am trying to confirm my eligibility to use those contributions toward preschool costs.  Technically, my wife works only on Saturdays while I stay home with my daughter, so while we both have earned income during the year, the preschool costs do not specifically enable my wife to work.  She otherwise stays home while my daughter is at school.  I think I am disqualified by test #3 on the above link, but otherwise meet the other tests.

[Carl]

I think what you'[re referring to is the Child & Dependent Care Tax Credit. The only way to qualify for that is if the daycare is required in order for both you and your spouse to work. So if you work during the week and the wife is off, and you change roles on Saturday, you don't qualify since both of you are not working at the same time. Therefore, the care is not required in order for the two of you to produce joint income.

[Opus 17]

Technically no, you must pay for care so that both spouses can work or attend school full time.

However, the way the form is structured, it relies on you to state that the expenses are qualified, and only looks for earned income from both spouses. (Same for the certification you are required to sign to get reimbursement from the FSA provider.)  If you claim the expenses are qualified, there isn't any automatic way to get caught, other than an actual audit.