Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I'm not sure if this is the best forum to ask, but I'm hoping some folks will know.
What is the maximum you can contribute to a dependant care account? Are their restrictions to the max, based on income? Anything else I need to know? My oldest son is starting preschool soon, which I believe is an eligible expense, and whatever the max is i'm sure we will hit it. so i'm just trying to figure out what we can contribute.
I'm not sure if this is the best forum to ask, but I'm hoping some folks will know.
What is the maximum you can contribute to a dependant care account? Are their restrictions to the max, based on income? Anything else I need to know? My oldest son is starting preschool soon, which I believe is an eligible expense, and whatever the max is i'm sure we will hit it. so i'm just trying to figure out what we can contribute.
$5000 and it depends if pre-school is a qualified expense or not....usually it is if it's in an actual school setting but check the IRS guidelines and/or ask the school.
Some COMPANIES may limit how much you can contribute to that account--rare--but they might only let you put in $4000 for example. Your HR person will know that. Also note that the Dependent accounts, while still a flex spend account, do not operate totally like a flex spend and only funds in the account are eligible for use where as a medical flex spend you can use the funds before they are deposited.
$5,000 / Year (so you can both work or look for work)
Its Use it or Lose it. Most plan for dependent care do not allow you to "Draw" in-advance of your payroll deduction. But if you Put Reimbursement request in that larger then the current balance, they will pay the balance that is in the fund, and then pay you the remaining balance of the request as you payroll deduction is send to them.
Eligible Expenses
Before-school and after-school care
Expenses for preschool/nursery school
Extended day programs
Au pair services (amounts paid for the actual care of the dependent)
Baby sitter (in or out of the home)
Nanny services (amounts paid for the actual care of the dependent)
Summer day camp for your qualifying child under the age of 13
Elder day care for a qualifying individual
Also Generally you can only set up the Dependent care during your Open Enrollment period, (Last fall normally), or if you have had a "Change" of life Situation" within 30 day of if you can re-elect to do it/stop it if you have had a "Change of life Situation"
Change in Status Events
Your election cannot be changed during the plan year, unless you experience a qualifying change in status event based on IRS regulations, such as:
A change in legal marital status (marriage, divorce or death of your spouse)
A change in the number of your dependents (birth or adoption of a child, or death of a dependent)
A change in employment status of you, your spouse or dependent
An event causing your dependent to satisfy or cease to satisfy an eligibility requirement for benefits
Your requested change must be due to and consistent with the event. You may change or terminate your dependent care FSA election only if:
The change or termination is due to and corresponds with a change in status that affects eligibility for coverage under the FSA plan.
Your election change is due to and corresponds with a change in status that affects the eligibility of dependent care expenses for the available tax exclusion.
You may also change your dependent care FSA election when an independent, third-party provider (other than a relative) significantly increases or decreases the cost of dependent care or when there is a coverage change, such as using another provider.
so my accountant got back to me. it breaks down like this:
if you make $43,000 hh income or more, you get 20% of $3,000 in eligible expenses for 1 child, of $6,000 in expenses for 2 or more. so $600 for 1, $1200 for 2 or more. the dependent care account of $5,000 saves about $1,000 in federal taxes. so i'm $400 ahead with 1 kid by going Dependent Care, $200 ahead when 2 are costing me. so for now, dependent care it is!
thanks everyone! hope this post helps some others as well!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
