- Program Details
- Reimbursement Procedures
- Contribution Limits
- Eligible Expenses
- Tax Credits
The Dependent Day Care Reimbursement Account is another of the tax saving options available to state employees through the Flexible Benefits Plan. Dependent day care expenses make up a significant part of many family budgets. The tax free Dependent Day Care Reimbursement Account lets you use tax free dollars to pay for such care if it is necessary to allow you to work and, if you are married, to allow your spouse to work or attend school full-time.
Enrollment into one or all of the tax free reimbursement accounts is done each year during the Annual Enrollment/Transfer Period through Edison Employee Self-Service.
The effective coverage date for the FSA program is the first day of the month following one full calendar month of employment. For example, if hire date is 8/2, coverage begins 10/1. Expenses incurred prior to the coverage begin date are not eligible for reimbursement. Your personnel officer can assist you with this process. Enrollment of new employees after the Annual Enrollment/Transfer Period is over requires an Election Form to be submitted. Employees are not able to enroll or make changes to enrollment in Edison after the Annual Enrollment/Transfer Period.
All claims must be filed for Dependent Care by March 31 for the prior calendar year to avoid your money being forfeited.
Estimate your dependent day care expenses for the upcoming plan year. This will help you decide the amount you want to contribute to the account. Contributions to the account will be deducted from each paycheck you receive during the year. When you have incurred dependent day care expenses, submit a Reimbursement Request Form with a receipt from the care provider. When filing for a reimbursement, you must provide the name, address, dates of service and tax identification number or social security number of the dependent day care provider. Amounts paid to you through the reimbursement account will not be subject to federal income tax or Social Security tax.
Depending upon your circumstances, you can put up to $5,000 a year into your Dependent Day Care Reimbursement Account. If you file your income taxes as "head of household," "single" or "married, filing jointly" you may put the full $5,000 a year into your account. If you are married but file a separate federal income tax return, you may deposit a maximum of $2,500 to your Dependent Day Care Reimbursement Account.
In order to qualify as eligible expenses, the amounts you spend on dependent day care must meet the following IRS rules:
- You may be reimbursed for charges for day care services either inside or outside your home for eligible dependents under the age of 13. Services must be for the physical care of the child and must not be provided by a spouse or dependent.
- You may be reimbursed for charges for the care of a dependent adult or child who is mentally or physically incapable of self care. To be eligible, services may not be provided by a spouse or dependent and the eligible dependent must regularly spend at least eight hours per day in your household.
- You may not use the Dependent Day Care Reimbursement Account to pay for a dependent's health care expenses. The account may not be used by a non-custodial parent to pay for child care or child support payments.
- If you use the Dependent Care Reimbursement Account to pay for day care or claim the Child or Dependent Care Tax Credit, you will need to complete Form 2441 when you complete your 1040 tax return (or Schedule 2 for a 1040A tax return). Click here to access the IRS site to print this publication.
Please note that expenses to attend kindergarten or a higher grade are not qualified expenses. Refer to IRS Publication 503 for further information.
The child care tax credit will vary depending on your income. For some people, the child care tax credit may offer more tax savings than a Dependent Day Care Reimbursement Account.
You may not use the same expenses for both the tax credit and your Dependent Day Care Account.
Any amounts contributed to your account will reduce on a dollar-for-dollar basis the annual dollar limit allowed by the IRS in determining expenses eligible for the tax credit. If you place that much or more in your reimbursement account, the tax credit is unavailable to you.
For more information on the tax credit, call the IRS at 1-800-829-3676 to request Publication 503-- Child and Dependent Care Expenses. Or, you may click here to access the IRS site to print this publication.