How does dependent care reimbursement work

The figure is based on average tax rates, including state, federal and FICA taxes. HealthEquity does not provide legal, tax or financial advice. Always consult a professional when making life-changing decisions. Previous Slide Next Slide. Nursery School. Summer Day Camp. Before or After School Programs. Elder Day Care.

Why choose us? How do I sign up? Pay for dependent care expenses Daycare. See the full list of eligible dependent care expenses See the full list of qualified expenses. Make your elections Once you choose an annual contribution, your employer will deduct that amount pre-tax in equal parts from each paycheck. Check back for updates. Limited Election Period Elections can only be made during open enrollment unless you have a qualifying life event, 5 which may include changes to: Employment status Including medical leave.

Marital status. Children under age 13 or other dependents who are disabled and incapable of caring for themselves are eligible. Both parents must be working or attending school to be eligible. Expenses must be incurred during the plan year, while you are contributing.

If you initiate an account mid-year, you can only seek reimbursement for expenses incurred AFTER you enrolled. If you increase your contributions due to a life change, additional contributions can only be used for expenses incurred AFTER the event. If you stop contributing, you can only use the funds to reimburse claims incurred during your participation.

The IRS allows you to claim work-related, dependent care expenses when you file your income tax return. You cannot use both the tax credit and the Dependent Care Reimbursement Account for the same expenses.

In accordance with Internal Revenue Code and supporting treasury regulations, the university uses forfeited funds to pay administration costs of the of the FSA program. In the alternative, forfeitures may also be used by the university to fund employee benefits administration costs, education and benefit election tools, MHealthy coaching and health initiatives, the Emergency Hardship Program, and university scholarship funds.

Submit your dependent care claim after services have been provided. If the expenses are eligible, all necessary documentation has been provided with your claim form, and contributions accumulated in your flexible spending account are equal to or greater than the amount of your claim, you should be reimbursed within ten business days from the date the claim is received by PayFlex.

Documentation that does not contain all the required information will be returned to you and may delay your reimbursement. For example, do not submit cancelled checks or statements showing only the previous balance, amount paid, or balance due.

Complete and file an IRS Form with your federal income tax return. The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents.

Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend, or terminate them.

Every effort has been made to ensure the accuracy of the benefits information in this site. However, if any provision on the benefits plans is unclear or ambiguous, the Benefits Office reserves the right to interpret the plan and resolve the problem. If any inconsistency exists between this site and the written plans or contracts, the actual provisions of each benefit plan will govern.

Flexible Spending Accounts. Eligible Dependents Eligible dependents include: Children age 13 and under whom you will claim as exemptions for federal tax purposes A spouse who is physically or mentally unable to care for himself or herself A dependent who is physically or mentally unable to care for himself or herself, and for whom you can claim an exemption.

Ineligible Expenses Baby-sitting so you can attend social events Care provided by your child under age 19 or any other person you claim as a dependent on your income tax return Cost of food, clothing, and diapers unless such costs are incident to and cannot be separated from the cost of the care Cost of transportation between your home and the place where dependent care services are provided Cost of specialty or educational before-school or after-school programs Expenses for overnight camps Expenses for which a dependent care tax credit is taken or expenses which are reimbursed under a Health Care Flexible Spending Account Expenses for education Late payment fees Placement fees for providing a dependent care provider Sports lessons, field trips and clothing These are just a sample of ineligible expenses.