If I have a balance in my Dependent Care FSA and my firm does not allow rollover, can't I claim that amount as a deduction? Where is this done?

[AnnaB · Accepted solution]

Unfortunately, no.  Dependent Care Flexible Spending Accounts have a use it or lose it rule.  You may be able to be reimbursed for expenses incurred up until December 31, but if you have amounts that are lost due to not using them - there is no deduction for this.

Only medical/health Flexible Spending Accounts (FSA) have the option of making the plan a rollover/carryover account.  Dependent Care FSA's still follow former rules where this feature is not allowed.

Most plans have a run-out period where you can continue to claim expenses incurred during the tax year until a deadline.  You may also have an additional grace period on this.

If funds are not used (based on incurred expenses by the end of the year), they are forfeited.