Many families* get tax relief for covering the cost of childcare through Dependent Care Flexible Savings Accounts (DCFSAs) which cover eligible expenses like daycare, afterschool care, and summer camp. During open enrollment each year, workers can decide how much to save pre-tax to these accounts based on their expected childcare expenses for the upcoming year. Now that most children are home indefinitely and the economic realities have changed dramatically, people may need to access their locked up DCFSA funds to get by. And they certainly don't want to permanently lose their childcare savings if they can't use in 2020 due to closure of childcare facilities, afterschool programs and summer camps. The accounts are use it or lose it and can only be for the outlined purposes. What can be done?
*There are also too many families who do not have access to this childcare savings vehicle if their employer does not offer the benefit. Childcare issues during COVID are real and there are disparities in how people are impacted. This unseen problem is just one piece of the childcare financial stability picture and more problems should be elevated and solved to comprehensively support people during this challenging time.