Currently the mother and I are unmarried, live
together, and we each claim $2,500 Dependent care FSA deduction through our
employers for our 3 year old son. We are about to have our 2nd
child next month in 2016. For next year (2017)
could each of us take one dependent completely keeping expenses separate and
claim $5,000 in each of our employers dependent care FSA plan. I have not seen anything where this is not
allowed nor have I found anything confirming it. I have yet to talk to an accountant or tax
attorney about the situation. I ask this because her employer is already in open enrollment and mine is about to in the coming two weeks where we need to set the dependent care FSA amounts in each plan. Thanks.
Yes, you can do that if you remain unmarried. Each of you can claim one dependent and can claim up to $5000 of FSA benefits toward that dependent's care.
For the current year, note that you can't claim any benefit unless you claim the child as a dependent. If you have been each paying $2500 toward care of the same dependent, one of you is going to lose that money unless you pay for care for the new child.
(If you each pay $2500 for the care of 3 year old "Adam", only the parent who claims Adam as a dependent can actually qualify. The parent who paid for care of Adam and does not claim Adam as a dependent will find that the $2500 is added back to their taxable income because it is an unqualified use of the account. However, if the other parent claims newborn "Betty" as a dependent, that parent can also claim reimbursement for expenses for the care of Betty.)