Dependent Care Expenses
Qualifying individuals-eligible for Reimbursement
- Care for your children, whom you claim as tax dependent, under the age of 14. An individual who is qualified is considered to be a “qualified child” or a “qualified relative”. A qualified relative’s dependent care expenses are not eligible if the qualified relative earns $4,300.00 or more in income a year. A person may qualify for only part of the year (if child turns 14 during year.)
- Care for spouse or dependents of any age who spend at least eight hours a day in your home who are mentally or physically incapable of self-care.
- Child that meets special dependency tests of divorced or separated parents.
Things to Consider Before Signing Up for a DCAP Account.
- You and your spouse must be employed in order to participate in this account unless
your spouse is a full-time student or actively looking for work or disabled.
- Kindergarten is not reimbursable, unless it can be determined that the educational part
is incidental and cannot be separated from the cost of care.
- Sleep away camps are not eligible. Even if the cost of daily care can be determined, the cost is still not eligible.
- The costs of food, supplies, bus transfer are not reimbursable.
- The maximum deduction per family per year (if allowed by your employer’s plan) is $10,500.00 when filing jointly, $5,250.00 per person, if filing separately.
- You must be willing to report your care provider and file form 2441 when filing your income taxes.
- Your care provider cannot be your dependent.
Reasons to Change Your Election During the Plan Year
- Changes in Employee’s Legal Marital Status, including marriage, divorce, death of spouse, legal separation or annulment.
- Changes in the number of Tax Dependents including the birth, adoption, placement
for adoption or death.
- Changes in Employment status including a termination or commencement of employment, a strike or lockout, a commencement of or return from an unpaid leave
of absence and a change in worksite.
- Dependent satisifies (or ceases to satisfy) Dependent Eligibility due to attainment of limiting age, gain or loss of student status, marriage or any similar circumstance.
- Changes in residence of Employee, Spouse or Dependent.
- You or spouse go out on FMLA, or another unpaid leave, or return from such a leave.
- A change in cost or coverage charged by your provider. This includes a circumstance where you choose to change your providers based on cost.
Remember, in order to make a change, the change must result in a gain or loss of eligibility for coverage and may be made only if it is on account of and consistent with a qualified status change.
- Household services if part of the service is for the care of qualifying persons (including FICA)
- Schooling below Kindergarten
- Qualifying Dependent Care centers, including virtual or online dependent care
- Before and after school care.
- Day Camps