Both my wife's co. and my co. offer childcare cafeteria plans (limit 5K). Can we both subscribe (net 10K)?

Question

We have huge childcare bills. Can we max out both of our cafeteria plans?

Answer 1

No, only $5000 a year can be contributed to childcare, pretax.

Here is the passage from the IRS:

If you exclude or deduct dependent care benefits provided by a dependent care benefit plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for, or $6,000 if two or more qualifying persons were cared for). (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. See Reduced Dollar Limit under How To Figure the Credit, later.)

Here is a link to the IRS page. If you want to search further, type child care at the top.

Answer 2

For DCFSA: there is a household limit. Although both you and your spouse can have separate accounts, the total cannot exceed $5,000 per household. You might want to check into one of you having a Dependent Care Flexible Spending Account, AND the other a Health Care Flexible Spending Account. Although you may max out the 5k in Dependent Care, there are definite advantages to having pre tax $$ go directly to out of pocket Health expenses that include over-the-counter medicines as well.