Pay rates for Child Care provider using DCFSA?

[sethm123]

We are considering hiring someone to help with child care coverage in the morning (between parent work departure time and bus pickup) and in the afternoons (between bus drop off and parent return).

Is there a guidance on the maximum or minimum hourly rate?

[rjs]

The tax law does not specify an hourly rate for dependent care paid from an FSA. The FSA, and the Child and Dependent Care Credit, look only at the total amount that you spend, not the hourly rate.

[sethm123]

Very helpful. What that limit? (For 2023 or 2024?)

Thanks!

[rjs]

The maximum annual amount that you can put into a dependent care FSA is $5,000. It does not change from year to year. I'm not sure that all dependent care FSA plans allow the maximum amount. Check with your HR or payroll department.

[sethm123]

So no specific upper limit on individual event charges, other than maybe "reasonable" standards and the balance of my FSA. 

For this scenario, I should be able to stay well within those limits. Thanks