Dependent Care FSA
What is a Dependent Care Flexible Spending Account?A dependent care flexible spending account (FSA) allows you to pay for employment-related dependent care services related to care of a qualifying individual on a pre-tax basis. For a list of eligible dependent care expenses, please click here.
My enrollment material says my dependent daycare expenses must be "work-related". What constitutes a "work-related" expense?Dependent care expenses must be incurred to enable you (and your spouse if married) to work or look for work. Work may include actively looking for work but does not include unpaid volunteer work, or volunteer work for a nominal salary. Your spouse is considered to have worked if he or she is a full-time student for at least five calendar months during the tax year, or if he or she is physically or mentally incapable of self-care.
Expenses you pay for dependent care while you are off work due to illness are not eligible for reimbursement. For a list of eligible dependent care expenses, please click here.
What expenses are ineligible under a dependent care FSA?Ineligible expenses include the following:
- Amounts paid to your child under the age of 19
- Expenses attributable to a disabled spouse or tax dependent living outside your household
- Educational expenses for Kindergarten and above
- Food expenses Incidental expenses (e.g., extra charges for special events or activities)
- Overnight camp
- Registration fees or administrative fees that are attributed to materials or administrative type fees
- Transportation expenses
This list is not all-inclusive. If you have questions regarding whether an expense is eligible or ineligible under a dependent care FSA, Please contact your HR department or CONEXIS.
How much can I allocate to my dependent care FSA?Your election may not exceed the maximum amount specified in Section 129 of the Internal Revenue Code. Currently, the maximum annual amount is $5,000 per year ($2,500 if you are married and file separate returns). Your maximum allocation may not exceed the earned income limitation. If you are single, the earned income limitation is your salary (excluding your contributions to the plan). If you are married, the earned income limitation is the lesser of your salary (excluding your contributions to the plan) or your spouse's salary.
What if my spouse participates in a dependent care FSA?Can we both elect up to $5,000? If you are married and file a joint tax return, the maximum amount you may exclude is $5,000. In other words, you and your spouse may not each claim $5,000. The maximum amount available if you are married but filing separate returns is $2,500. Please note you may not "double-dip" expenses (e.g., expenses reimbursed under your dependent care FSA may not be reimbursed under your spouse's dependent care FSA and vice versa).
Who is a qualifying individual?A qualifying individual is any of the following: · A dependent under the age of 13 who resides with you and for whom you are entitled to a personal tax exemption as a dependent (as defined by Code Section 151(c)); however, if you are divorced, the child is a qualifying individual with respect to you if the child lives with you even if you have permitted the non-custodial parent to take the exemption. · A spouse or other tax dependent who resides with you and is physically or mentally incapable of self-care.
How often are reimbursements made?Claims are reimbursed on the schedule chosen by your employer. For more information regarding the reimbursement schedule chosen by your employer, please contact your HR department or CONEXIS.
Where can I get a reimbursement form?You can download reimbursement forms by clicking on the Resources link to the left. Forms also are available on the Participant web site at MyConexis.
What do I need to submit in addition to a reimbursement form?If the employee and provider certifications on the claim form are completed and signed, additional documentation is not required. If the provider certification is not completed, attach an itemized statement from your provider including the date(s) of service, the name and date of birth of your dependent, itemization of charges and the provider's name, address and Tax ID/SSN number.
Is Kindergarten tuition an eligible expense?No. Fees associated with kindergarten are considered educational in nature and cannot be reimbursed under a dependent care FSA.
Is tuition an eligible dependent care expense?No. Fees associated with kindergarten as well as tuition for children in first grade and above are not eligible for reimbursement under a dependent care FSA. Expenses related to before and after school care or nursery school expenses are eligible if the care is primarily custodial in nature. For a list of eligible dependent care expenses, please click here.
I pay my neighbor to watch my 13-year-old after school. Is this an eligible expense?No. The individual being cared for must meet the definition of a "qualifying individual. A child age 13 or above is not a qualifying individual.
My 16-year-old daughter cares for my 8-year-old son after school. Can I pay my daughter and file those expenses through my flex plan?You may not be reimbursed for payments made to:
- A dependent for whom you (or your spouse) can claim an exemption.
- Your child who is under age 19 at the end of the year, even if he or she is not your dependent.
If I participate in the dependent care Flexible Spending Account (FSA) plan, do I need to report anything on my personal income tax return at the end of the year?Yes. You must identify all persons or organizations that provide care for your child or dependent by filing IRS Form 2441 -Child and Dependent Care Expenses, along with your Form 1040 each year (or Schedule 2 for Form 1040A). Please note filing requirements are subject to change by the IRS. Consult your tax advisor have specific questions.
If I participate in the Dependent Care FSA, will I still be able to claim the household and dependent care credit on my federal income tax return?You may not claim any other tax benefit for the tax-free amounts received by you under the dependent care FSA, although the balance of your eligible employment-related expenses may be eligible for the dependent care credit. Please consult your tax advisor to determine whether the tax credit may be more favorable to you than participating in the dependent care FSA.
I signed up to contribute $400 per month into my dependent care Flexible Spending Account (FSA) plan. My actual expenses are closer to $500 per month. Should I submit my claim form for $400 or for $500?You should file your claim for the actual amount of charges, $500 in this case The maximum reimbursement you may receive is equal to the current account balance in your dependent care FSA. If your dependent care expenses exceed the balance in your dependent care FSA, the excess expenses will be "pended" and paid when additional contributions are posted to your account by your employer. Any remaining expenses at the end of the plan year will not be carried over to the next plan year.
What if my eligible dependent care expenses during the plan year are less than the annual amount I have elected?All money contributed to a dependent care FSA must be used to reimburse qualified expenses incurred during that plan year. Money not used to reimburse eligible expenses is forfeited. The unused portion of your dependent care FSA may not be paid to you in cash or other benefits, including transferring money between FSAs. To reduce the risk of forfeiture, it is critical for you to be conservative when choosing your annual election amount. Our online savings calculator can help you estimate your annual expenses.
What if I decide to change the amount I elected?Your election is irrevocable for the plan year unless you have a change in status or other qualified event as defined in the IRS Regulations and your employer's plan permits such qualified changes. Qualified changes in status include:
- A change in marital status (such as marriage, divorce or death of your spouse)
- A change in the number of your dependents (such as birth or adoption of a child, or death of a dependent)
- A change in employment status of you, your spouse or dependent
- An event that causes your dependent to satisfy or cease to satisfy an eligibility requirement for a particular benefit
- A change in residence of you, your spouse or dependent
Your requested change must be on account of and consistent with the event. With respect to your dependent care FSA, you may change or terminate your election only if:
- Such change or termination is made on account of and corresponds with a change in status that affects eligibility for coverage under the Plan; or
- Your election change is on account of and corresponds with a change in status that affects the eligibility of dependent care assistance expenses for the available tax exclusion.
You also may change your dependent care FSA election when an independent, third party provider (other than a relative) significantly increases or decreases the cost of dependent care or when there has been a coverage change (e.g., a change in providers).
The information above is provided under the assumption your employer's plan allows all changes permitted under the IRS Regulations. An employer can restrict mid-year election changes through plan design. Please see your summary plan description for specific rules governing your plan.
If you experience a change in status or other qualified event, please contact your HR representative to obtain the appropriate paperwork for completion.