Does my daycare provider have to be licensed in order to participate in the Dependent Care FSA?
Generally No. The daycare provider you use must claim the money they receive for providing their service as income. If you participate in the Dependent Care FSA, the IRS will require you to report the Taxpayer Identification Number or Social Security Number of the provider on your federal tax return. Flex Administrators also requires this information to be provided on the Mandatory Statement for Daycare that is completed each plan year.
