1.
Is $5000.00 per calendar year the maximum dollar
amount that my family may contribute to a Dependent
Care Assistance Program, or may I contribute $5000.00
with my employer's plan while my husband contributes
additional dollars to his employer's plan?
Answer:
The $5000.00 per calendar year maximum is per family.
2.
As of January 1, 2003, the tax credit has increased.
If I have one child, I may take a tax credit of up
to $3000.00 for eligible Dependent Care expenses.
If I have two or more children, I may take credit
of up to $6000.00. My questions is, how do I know
which is a better tax advantage for me? Answer:
If you go back to the Taxsaver Plan Home Page and
click on Tax Benefit Calculator, you will be able
to find this information.
3.
Is kindergarten a reimbursable expenses under a Dependent
Care Assistance Program? Answer:
No, kindergarten is not a reimbursable expense under
a DCAP.
4. Are canceled checks
acceptable forms of receipt for DCAP's? Answer:
No. An acceptable receipt would be a receipt signed
by the provider, stating the dates of care, cost
of care and the dependent(s) name(s).
5.
Why should I elect to participate in a Dependent Care
Assistance Program offered by my employer instead
of taking tax credit when I file my income taxes?
Answer:
The reason is tax savings. To determine your personal
tax savings, please go back to our home page and
click on "Benefits Calculator" to see your tax savings
by participating in a Dependent Care Assistance
Program.
6.
My parents are coming for a visit this summer and
they would like to take care of our kids while they
are here. I would like our kids to spend time with
their grandparents, so I intend to remove them from
day care for the summer. I would, therefore, like
to stop my deductions for the Dependent Care Assistance
Program. May I do this? Answer:
A visiting relative does not qualify as a reason
to change, or revoke, your election. You may, however,
pay your parents the fee that you are paying your
current provider, as long as you do not claim your
parents as legal tax dependents.
7.
My husband's mother retired last week, and she has
offered to watch our children during the day while
we are at work. I currently have the children enrolled
in a day care facility and I am participating in the
Dependent Care Assistance Program offered by my employer.
I would like to drop my Dependent Care Assistance
Program election. May I do this? Answer:
Yes, you may drop your election.
8.
My day care provider charges $5.00 per week for snacks
and a $10.00 monthly supply fee. Is this a reimbursable
expense under my employer's Dependent Care Assistance
Program? Answer:
No, itemized costs like food, supply fees, transportation
fees are not reimbursable
under a Dependent Care Assistance Program.
9.
In March, I must pay $200.00 to secure my son's space
in summer day camp. This $200.00 is applied to the
cost of the camp. May I be reimbursed in March for
this expense? Answer:
No, but you may be reimbursed for the $200.00 once
the camp begins. The cost of the service must be
incurred in order to be reimbursed.
10.
As part of my daughter's summer care, I have enrolled
her in a piano camp, as well as a swimming camp. Are
these expenses reimbursable under the Dependent Care
Assistance Program? Answer:
Yes, expenses like these camps are reimbursable
for summer care. Remember that summer school programs
that offer educational courses for credit towards
courses that are required by the state that you
live in for graduation are NOT reimbursable.
11.
My son's after school provider offers a soccer camp
for an additional $20.00 per week. Is the soccer camp
a reimbursable expense, or is only the cost for the
after school care reimbursable under the Dependent
Care Assistance Program? Answer:
The charge for the soccer camp would not be reimbursable,
as it is not a part of the after-school care, but
secondary to the care.
12.
The Day Care Expenses for my children total $7000
a year. My husband and I are better off participating
in the Dependent Care Spending Account Plan that my
employer offers from a tax standpiont. We are only
allowed to set aside $5000 pre-tax dollars for 2003
under this Plan. May we take $1000 in tax credit when
we file our 2003 income taxes? I know that the limit
for Tax Credit is $6000, as long as you have two or
more children in day care. Answer:
Yes, you may take the additional $1000 in tax credit
when you file your income taxes at year end.
13.
My divorce decree states that my ex-spouse can claim
our daughter as an exemption on alternate years. I
am the custodial parent and pay child care expenses.
Can I claim child care expenses on the years he takes
the exemption? Answer:
The Child and Dependent Care Credit can only be
claimed by the custodial parent. This is true even
if you cannot claim the child's exemption because
the divorce decree allows the other parent to claim
the exemption, or you have released the exemption
on Form 8332.
14.
I am thinking of having a family member baby-sit for
my child full time in their own home while I work.
Are either of us responsible for taxes on the money
I would pay? Can I claim this money as a child care
expense even though my family member is not a registered
day care provider? Answer:
You may have qualified child care expenses, if the
family member is not your dependent or your child
under the age of 19 and you meet all the tests to
claim the Child and Dependent Care Credit. Your
family member will be responsible for paying taxes
on the money earned and will be considered to be
self-employed.
15.
I am planning on a leave of absence from my job this
year. When I go out on leave, is it possible to continue
my Dependent Care Account through my Employer?
Answer:
While you are out on leave, you may continue to
contribute to the Dependent Care Account if you
are on a paid leave. However, any expenses that
you incur while on leave will not be reimbursable.
For example, if you are going out on paid leave for
the month of April to care for a parent that is
ill, you will still have child care expenses. The
pre-tax deductions are still being taken from your pay each
pay period and are building in your account.
When you submit a receipt for child care expenses
incurred during April, the claim will not be reimbursed.
You may be reimbursed those dollars deducted in
April when you return to work and have qualified
day care expenses.
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