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Help Employees Save Big with Dependent Care FSAs: Why SitterSync Is the Missing Link

Childcare is one of the biggest challenges facing working families today. As an employer, you may already offer a Dependent Care Flexible Spending Account (DCFSA) to help. But here’s the problem: many employees aren’t using it — or they’re using only a small portion of it. Why? Because they don’t know what counts, how to keep records, or how to get reimbursed.

That’s where SitterSync comes in.

school age kids sittersync

SitterSync is a tool that helps working parents manage the real way they get childcare — through local babysitters, friends, neighbors, and family referrals. It gives them the power to track, pay, and document those jobs so they qualify for DCFSA reimbursement. For companies, it’s a simple way to boost the value of an existing benefit, support working parents, and save on payroll taxes at the same time.

In this post, we’ll walk through:

  • What a DCFSA is and how it works

  • What kinds of care qualify

  • Why employees struggle to use it

  • How SitterSync solves the problem

  • The value for employers (in dollars and employee well-being)

What Is a Dependent Care FSA?

A Dependent Care Flexible Spending Account (DCFSA) lets employees set aside up to $5,000 of pre-tax income per year to pay for childcare expenses. That means no federal income tax, no Social Security tax, and no Medicare tax on those dollars. For a household in the 30% tax bracket, that’s a potential savings of $1,500 per year.

DCFSAs are offered by employers as part of a benefits package. Employees enroll during open enrollment or when they have a qualifying life event (like having a baby). Then they submit claims for eligible childcare expenses throughout the year.

Who Can Use It?

DCFSA funds can be used by parents who:

  • Have children under age 13 (or dependents who can’t care for themselves)

  • Are working (or looking for work)

  • Pay for care so they can do their job

What Kinds of Care Qualify?

Many people think only daycare centers qualify, but that’s not true. The IRS allows a wide range of care providers, including:

  • Daycare and preschool

  • Before- and after-school programs

  • Summer day camps

  • Babysitters (yes, even personal ones)

  • Nannies and in-home care

  • Family, friends, or neighbors — as long as they’re not claimed as dependents

As long as the care is for work-related reasons and meets the IRS guidelines, it can be reimbursed.

So Why Aren’t More Employees Using Their DCFSA?

Even though DCFSA benefits are valuable, many employees don’t use the full amount they’re eligible for — or avoid it entirely. Why?

Here are the top reasons:

1. They Use Informal Childcare

Parents often rely on people they trust — local babysitters, friends, neighbors, or extended family. These informal providers don’t give formal invoices or tax-compliant receipts. That makes it hard to submit DCFSA claims.

2. They Don’t Know What Qualifies

Employees may not realize their everyday care arrangements are eligible. If it’s not a big daycare center, they may assume it doesn’t count.

3. Paperwork Is a Headache

To get reimbursed, employees need to submit documentation with:

  • Provider name and address

  • Dates and hours of care

  • Amount paid

  • Tax ID or Social Security number of the caregiver

For care arranged casually over text or Venmo, this information isn’t easy to gather after the fact.

4. Fear of IRS Trouble

Even when the care qualifies, employees may be nervous about making a mistake or being audited. Without a system for organizing their records, it feels too risky.

5. They Stop Using the Benefit After Preschool — Even Though They Still Qualify

Here’s a surprising fact: DCFSA eligibility lasts until a child turns 13 — but most families stop using the benefit once their kids enter elementary school.

While the Dependent Care Flexible Spending Account (DCFSA) remains available until a child turns 13, many families tend to use the benefit most heavily during the early childhood years, with participation often decreasing once children enter grade school. According to IRS guidelines, working parents of school-age kids can still claim coverage for eligible expenses such as babysitting, after-school programs, summer camps, and more (IRS Publication 503, 2024).

  • After-school programs

  • Summer camps

  • Homework help

  • School holiday coverage

  • Drop-offs and pickups

All of these can qualify for reimbursement under IRS guidelines.

The problem isn’t that the benefit disappears — it’s that parents don’t realize how to use it once their care needs shift from full-day to part-time or flexible arrangements.

SitterSync bridges that gap by giving parents the tools to keep documenting those nontraditional care arrangements — long after daycare ends.

Enter SitterSync: The Platform Built for Real-Life Childcare

SitterSync was designed to help families manage the real-world childcare they already use. Unlike other apps that help you find a babysitter, SitterSync helps you manage care providers you already know and trust.

With SitterSync, employees can:

  • Schedule and log care jobs

  • Pay sitters directly through the app

  • Track job history and categorize expenses

  • Automatically generate IRS-compliant receipts

  • Create year-end reports for taxes or DCFSA reimbursement

Everything is organized and ready to go when it’s time to file a claim.

What Makes It Work?

Here’s why SitterSync is so effective:

✅ Documentation Made Easy

Each care job has a digital paper trail — date, time, amount, and provider details. No need to dig through emails or texts.

✅ Payments Are Tracked

Employees can pay their sitters through SitterSync, ensuring every transaction is logged and categorized.

✅ Receipts Are DCFSA-Ready

SitterSync provides detailed receipts that meet DCFSA requirements, including provider information and dates of service.

✅ Year-End Summary

At the end of the year, employees can download a complete report to simplify their taxes and FSA claims.

✅ Peace of Mind

Everything is clear, organized, and compliant — no second-guessing.

Real-Life Example: Sarah, a Working Mom

Sarah is a marketing manager with two kids in elementary school. Her job offers a DCFSA, and she contributes the full $5,000 per year. But she doesn’t use a daycare center. Instead, she hires a few college students from her neighborhood to pick up the kids from school and stay with them until 6 PM.

Before SitterSync, Sarah didn’t claim any DCFSA funds. She didn’t have receipts. Her sitter was paid through Venmo, and nothing was documented. She worried about making a mistake on her taxes.

After starting with SitterSync, Sarah:

  • Schedules all after-school care in the app

  • Pays her sitter directly through the platform

  • Gets monthly summaries and receipts

  • Submits claims to her FSA administrator with confidence

Now she’s saving around $1,500 a year — and her employer saves, too.

Why It Matters for Employers

Offering a DCFSA is a great first step. But if employees don’t use it, the impact is limited. With SitterSync, your company can help employees unlock the full value of the benefit.

Benefits for Employers:

🔹 Increased Benefits Utilization

More employees using their DCFSA means they’re getting more from your benefit offering — without adding cost.

🔹 Lower Payroll Taxes

DCFSA contributions are pre-tax, which means you don’t pay FICA taxes (Social Security and Medicare) on that money. For every $1,000 in contributions, you save about $76 per employee.

🔹 Happier, More Productive Employees

Childcare stress is a top reason for absenteeism and turnover. Giving parents tools that make life easier improves well-being and loyalty.

🔹 Stronger Employer Brand

Offering family-friendly, tax-savvy benefits makes you more attractive to top talent — especially as younger workers prioritize work-life balance and parental support.

What HR Teams Can Do Next

If you’re an HR leader or benefits decision-maker, here are some easy steps to bring more value to your DCFSA program:

  1. Educate employees about what qualifies. Make it clear that in-home care, babysitters, and non-center providers can be eligible.

  2. Promote SitterSync as a companion tool. Show how it simplifies recordkeeping and boosts confidence in claiming benefits.

  3. Include SitterSync in your open enrollment materials. A simple flyer or email explaining how it works can go a long way.

  4. Support work-life balance. Acknowledge that care arrangements are personal and flexible — and give employees the tools to make it work.

  5. Highlight the tax benefits. Many employees (and even HR teams) don’t realize that DCFSA contributions lower taxable income and reduce employer payroll taxes.

Final Thoughts: Make Every Benefit Count

In today’s workplace, benefits must go beyond perks — they need to solve real problems. Childcare is one of the biggest challenges working families face. And while the DCFSA is a powerful tool, it’s only effective if employees can use it easily and confidently.

SitterSync fills the gap between informal care and formal benefits.

It helps parents document their real-life childcare, qualify for tax savings, and bring peace of mind to a chaotic part of daily life. And for employers, it’s a no-brainer: greater DCFSA usage, happier employees, and measurable savings.

If you’re ready to help your team get more from their benefits — and strengthen your company’s position as a family-friendly employer — it’s time to take a closer look at SitterSync.

👉 Connect with us to learn how SitterSync can support your DCFSA program.
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