Flexible Spending Accounts
dependent care account
calculate your contribution . | . dependent care account vs tax credit

• Health Care Account
• Dependent Care Account

Like the Health Care Account, the Dependent Care Account is a voluntary plan that lets you use before-tax money to reimburse yourself for eligible expenses you incur if you must pay someone to care for your dependents while you work. This account may not be used toward any educational expenses beyond pre-school (Nursery school). You may choose to participate in this account or decline participation.

Who Can Be Covered Under The Dependent Care Account
You can use the Dependent Care Account to pay work-related day care expenses for any member of your household for whom you can claim expenses on a Federal Income Tax Form 2441 “Child and Dependent Care Expenses.” Dependents must be:

• Children under age 13, or
• Dependents who are physically or mentally unable to care for themselves.

The Account is for work-related child and elder care expenses only. You cannot use the account to pay for non-work-related expenses.

Eligible Dependent Care Expenses
You should make sure that the dependent care expenses that you are currently paying for qualify under this Plan. You can use the Dependent Care account to reimburse the following expenses:

• An educational institution for pre-school children such as nursery school. For older children, only expenses for non-school care are eligible.
• A dependent (day) care center, provided that the facility complies with all applicable state and local laws and provides care for at least six individuals.
• Day care centers for the care of disabled dependents while you are working (if the center follows state and local laws)
• An individual who provides care inside or outside your home. The individual may not be a child of yours under age 19 or anyone you claim as a dependent for federal tax purposes.
• KidKare or Wee Care charges for sick dependent care while you are working
• Social Security, unemployment taxes and related state taxes that you must pay for someone who cares for your dependents while you're working.

In order to access the Dependent Care Account, you must provide the Employer Identification Number (EIN) or Social Security Number of the caregiver. The caregiver is responsible for all applicable income taxes.

If you have questions about eligible expenses, you may call Custom Design Benefits, Inc. at 513-598-2929.

Contributions
If you decide to contribute to the Dependent Care Account, the minimum contribution is $10 per biweekly paycheck ($260 a year). In general, the federal government limits the maximum contribution to $5,000 per year per household. That means that if you're single, the maximum is $192.31 per biweekly paycheck (up to $5,000 annual maximum). If you're married, the maximum will vary, as shown in the following chart:

Contributions will be deducted on a before-tax basis from every paycheck during the eligible period.

Dependent Care Account vs. Tax Credit
The same expenses that are eligible for the Dependent Care Account are those eligible for the federal income tax credit. If you reimburse the expense through the account, you won't be able to use that same expense as a tax credit.

For most people, using the Dependent Care account saves them more money than the tax credit. If you have questions about your own situation, talk to a tax advisor.

Using Your Account
When you incur eligible expenses, you will need to complete a claim form available from your human resources department or Custom Design Benefits, Inc. Unlike the Health Care Account, money must be withheld from your pay and placed in your Dependent Care Account before it can be reimbursed to you. Remember it is important to include the Employer Identification Number (EIN) or Social Security Number of the caregiver. The caregiver is responsible for all applicable income taxes. Mail the completed claim form and include an invoice or other documentation to show amounts you paid to caregivers to Custom Design Benefits, Inc. Your claim will be processed and payment will be mailed to your home. Checks are issued on the first and fifteenth of each month. A statement will also accompany each check to report the status of your account activity.

Deadlines For Filing Claims
If you remain in a benefits-eligible status and are enrolled in the Dependent Care Account until the end of the calendar year, you have until March 31 of the following calendar year to submit claims for eligible expenses. Such eligible expenses must have been incurred during the just completed calendar year. If you terminate employment or change to a benefits-ineligible status, you can only claims expenses incurred up to the end of the month in which you terminate employment or change status. You have 90 days after the date of your termination or change to benefits-ineligible status to submit such claims.