Dependent Day Care Account
The Dependent Day Care Account is designed to pay for the care of children or adults who qualify so that employees can work. Eligible expenses include:
- In-home care
- Care at another’s home
- Nursery or preschool tuition
- After-school care
- Dependent care centers
- Summer day camp, as long as that cost compares reasonably with other alternatives
Employees will need to provide detailed information about their dependent care providers, including: name, address, and Social Security Number or Tax Identification Number. Without this information employees cannot be reimbursed.
The Dependent Day Care Account has a few important limitations:
- Care for dependents (who must reside in employees' homes for at least 8 hours a day) must be necessary in order for employees and their spouses (if married) to work
- Eligible dependents are defined as children under age 13, or spouses or legal dependents of any age who are physically or mentally incapable of self-care
- Dependent Care, such as private baby-sitting, may not be provided by someone who can be claimed as a dependent for tax purposes, such as an older son or daughter
- If dependent care services are provided at a day care center, the center must comply with applicable state and local laws and licensing requirements
- Maximum contribution, the total amount of money that can be set aside on a pre-tax basis for dependent care, cannot exceed $5,000 per household per tax year
Click here to view full information about the Flexible Spending Account (FSA).