You set aside part of each paycheck pre-tax to pay for eligible care expenses, so you can work or look for work. When you have an eligible expense, you submit a claim form and, once approved, are reimbursed with tax-free dollars from your account.

You can contribute up to $5,000 annually (or $2,500 if married and filing separately) to your dependent care reimbursement account. The amount you choose to contribute for the year is taken out in equal installments each pay period. You can be reimbursed for your expenses up to the amount you’ve contributed so far in the plan year.

Give some thought to calculating how much money to contribute for the year:

• Unless you have a qualified family status change, you cannot change your contribution amount during the year.
• If you don’t use all the money you’ve contributed by the end of the year, you lose it. However, some employers offer a grace period of up to 2 1/2 months to use the money.