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Flexible Spending Accounts

Dependent Care

Q: What are eligible dependent care expenses?
This Plan follows IRS guidelines that allow you to use pre-tax dollars to pay for daycare services provided to your children under age 13, as well as for an incapacitated parent or spouse. You are eligible if you are a single working parent, you have a working spouse, your spouse is a full-time student for at least five months during the plan year while you are working (refer to the IRS earned income limits for specific contribution levels), or your spouse or dependent parent is disabled and unable to provide for his or her own care. Eligible expenses include services provided: (a) inside or outside of your home by anyone other than your spouse, one of your dependents, or one of your children under 19 years of age, (b) by a child care center, or (c) by a housekeeper whose services include dependent care. Day camps are eligible for reimbursement; however, overnight camps are not eligible.
 
Q: Is it better to utilize the Dependent Care Flexible Spending Account or the federal income tax credit for dependent care expenses?
Your individual circumstances and income will determine whether the federal, state (where eligible) and FICA tax savings under the Dependent Care Spending Account provide greater tax benefits than using the federal tax credit. Since individual tax situations vary, it is important for you to determine which approach offers the most favorable tax savings. Contributions to the Dependent Care Spending Account reduce your federal tax credit availability.

Q: How much money can I set aside on a pre-tax basis for dependent care?
You can set aside a maximum of $5,000 per plan year (or the maximum contribution limit set by your employer) for dependent care expenses if you are a single parent or married and filing jointly; $2,500 if you are married and filing separately. The legal maximum is also $5,000 per calendar year in the event you have access to another Dependent Care FSA plan through your spouse or another employer. For the out-of-pocket Health Care Spending Account maximum, refer to your "Summary Plan Description" booklet.

Q: Do I need to provide IMS with any documentation when I file a claim?
Yes, if you participate in the dependent care account, you must provide IMS with the name(s) of your child(ren), the name and tax ID number of the daycare provider. This information is listed on the claim form which can be obtained from our web site or from your employer.

A stipulation imposed by the IRS is that the service provider must be over 18 years of age, and cannot be an individual for whom a personal tax exemption is claimed.