Child Or Dependent Care Assistance
A Dependent Care Reimbursement Account allows you to submit day care expenses for eligible children and/or other dependents (if you claim them as dependents for income tax purposes). These expenses must be incurred to allow you and your spouse to work, unless your spouse is a full-time student or incapable of self-care. Day-care expenses are covered if the dependent is under 13 or is physically or mentally incapable of self-care. An incapacitated dependent who is over 12 must regularly spend at least eight hours a day in your household to qualify.
Eligible child care can be provided inside or outside of your home. However, the service cannot be provided by a person you claim as a dependent. If the services are provided by a day care facility with more than six children, then it must be state licensed.
Housekeeping expenses are reimbursable if provided by a full-time, live-in housekeeper who cares for your dependent children.
The maximum amount of child or dependent care expenses that can be reimbursed to you cannot be more than your annual income, or your spouse, whichever is lower. In addition, the maximum amount cannot exceed $5,000 ($2,500 if you and your spouse file separate tax returns). Finally, dependent care expenses that are reimbursed cannot be applied toward the federal income tax credit for dependent care.
You should compare the differences between taking the individual dependent care credit on you tax return or using the Flexible Benefit Plan for dependent care expenses. In general, you will be better off using the Flexible Benefit Plan if your adjusted gross income exceeds $15,000 annually.
Once you've estimated how much you expect to spend for these expenses, up to $5,000 per year, you then divide that figure by 24, the number of times you are paid during the plan year. This gives you the amount that you will reduce your salary by each paycheck.
During the year, whenever you incur an eligible expense, you submit a claim form to our claims processor along with suitable documentation to Employee Security, Inc., 5565 Sterrett Place, Suite 300, Columbia, MD 21044-2608. Suitable documentation must include the date of service, amount charged, name of dependent care provider, Federal Tax ID or Social Security Number of provider, and name of dependent.Back To Flexible Spending Accounts