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Dependent Daycare
Flexible Spending Accounts
Give Yourself a Raise!
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Do you have dependents that require daycare?
• Care at licensed daycare• Before and after school care• Daycare outside your home, including babysitter
The above listed items are eligible for reimbursement under a dependent daycare flexible spending account, and utilizing the account may reduce taxes you pay
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Are some dependent daycare services ineligible for dependent
daycare reimbursement?
Yes! You may not seek reimbursement for:
• Tuition for education (i.e. Kindergarten)• Overnight Camps• Transportation costs and field trips
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If you have eligible expenses
1. Come up with an amount that you and your family will spend on eligible expenses for the plan year (for example, $5000)
2. Complete an application for dependent care reimbursement and make your annual election (in this case, $5000).
3. The $5000 election is divided by your number of payrolls, and an even amount comes from each paycheck.
4. Prior to the start of the plan year, you will receive a Debit Card from Nyhart.
5. During the plan year, use the Debit Card for eligible expenses until your annual election ($5000) is expired.
6. After spending the election ($5000), begin paying out of pocket as you traditionally would
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Notable Facts
• The IRS has a $5,000 per household maximum for dependent daycare reimbursement
• A key difference from medical reimbursement! For dependent daycare, a deduction must actually be taken from your paycheck before you are eligible for reimbursement
• Keep your receipts! You may occasionally be asked to provide a copy• Use it or lose it – so be sure to incur all your Dependent Daycare
Flexible Spending Account money during the plan year, because you lose any money that you do not spend.
• 90 day grace – if you incur bills during the plan year you may claim the expenses up to 90 days after the end of the plan year
• You must be eligible for the district’s medical plan to participate, but you may participate in dependent daycare even if you do not take the district’s medical insurance plan
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Notable Facts (continued)
• The plan year begins September 1 each year and lasts through August 31 the following year.
• A short plan year is established of March 1 – August 31, 2013 for this enrollment period
• A child dependent must be under age 13 to qualify for reimbursement
• Expenses incurred should allow you or your spouse to be gainfully employed
• The expenses cannot be paid to a child of yours under age 19 or to a person whom your spouse or you may claim as a dependent
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How does Dependent Daycare Reimbursement save me money?
• Each pay period when the payroll deduction is taken from your paycheck, the deduction reduces your taxable income
• Federal, State, Local, and other Payroll taxes are eliminated due to your reduction in taxable income
• As a result, you spend money on eligible items you would have purchased anyways through your daycare provider, however, you have reduced the amount of taxes you pay
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Dependent Daycare Reimbursement is right for me if:
• You are eligible for the Zionsville Community Schools medical insurance
• You have an eligible dependent that receives eligible dependent daycare
• Paying less taxes interests you
* Remember – with dependent care reimbursement the deduction must be taken for your paycheck before you are eligible for reimbursement. You may not seek advance reimbursement.