Employees set aside pre-tax payroll deductions in this take care account to budget for the daycare expenses of a dependent adult who cannot physically or mentally care for themselves.
Qualified expenses include housekeeper and nurse's fees for services provided inside your home. Expenses are eligible to the extent they are attributable to adult care and incidental household services. Daycare expenses for services outside your home also qualify, if they are for the care of a dependent that regularly spends at least 8 hours per day in your home. To qualify, expenses paid for daycare must allow an employee or the employee's spouse (if they are married) to work or look for employment.
The IRS also offers employees the option of saving for daycare with a credit
that the employee can take on Form 1040.