Dependent Care Expenses

Qualifying individuals-eligible for Reimbursement

  • Care for your children, whom you claim as tax dependent, under the age of 13. 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 $3650.00 or more in income a year. A person may qualify for only part of the year. (If child turns 13 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 is $5000.00 when filing jointly, $2500.00 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.

Qualifying Expenses

 

  • 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