Daycare Provider Licensing Requirements for Dependent FSAs: A Guide

Yes, daycare providers must be licensed, registered, or approved by the state where they operate to qualify for Dependent Care Flexible Spending Account (FSA) reimbursements. The IRS mandates this because FSA reimbursements are tax-advantaged benefits subject to specific rules.

Licensing ensures providers meet regulatory standards and that FSA funds are used for qualified daycare expenses.