Benefits Plans - Flexible Spending Accounts: Dependent Care -
Dependent Care FSA Eligible Expenses
As a general rule, eligible dependent care expenses are those associated with the care provided to your eligible dependents while you (and your spouse if you are married) were either at work or looking for work, or so your spouse could attend school full-time.
Eligible dependents are:
- Children age 12 and under who you will claim as exemptions for federal tax purposes.
- A spouse who was physically or mentally unable to care for himself or herself.
- A dependent who was physically or mentally unable to care for himself or herself, and for whom you can claim an exemption.
Eligible Dependent Care Expenses
This list is not complete; other items may be eligible. If you anticipate large expenses that are not listed, or you have other eligibility questions, contact PayFlex. You can also find a complete description of eligible dependent care expenses in IRS Publication 503, "Child and Dependent Care Expenses," available for download at http://www.irs.gov/pub/irs-pdf/p503.pdf. To be eligible for reimbursement, care must be provided by a:
- Home-based licensed day care
- Licensed day care center (elder care or child care)
- Nursery school
- Private baby-sitter in your home or theirs
- Private preschool program
- Providers or care for disabled dependents
- Home-based licensed day care; or
- Public or private before-school and/or after-school programs for custodial care
- Public or private summer day camps
- Your child, age 19 or older, or any other individual you do not claim as a dependent on your income tax return
- Baby-sitting for social events
- Care provided by your child under age 19 or any other person you claim as a dependent on your income tax return
- Cost of food, clothing, and diapers (unless such costs are incident to and cannot be separated from the cost of the care)
- Cost of transportation between your home and the place where dependent care services are provided
- Cost of specialty or educational before-school or after-school programs
- Expenses for overnight camps
- Expenses for which a dependent care tax credit is taken or expenses which are reimbursed under a Health Care Flexible Spending Account
- Expenses for education
- Late payment fees
- Placement fees for providing a dependent care provider
- Sports lessons, field trips and clothing
Other Important Guidelines
As you plan your expenses dependent care expenses, consider these guidelines:
- You cannot use the Dependent Care FSA to pay for care of a qualifying person outside your home unless that person regularly spends at least eight hours per day in your home.
- Your expenses are reimbursable only if the dependent care is provided to make it possible for you, and your spouse if you are married, to work or look for work, or to enable your spouse to attend school full-time.
- You can only be reimbursed for care delivered in the calendar year. You incur expenses when the care is provided rather than when you are billed or when you pay for the care. You will not be reimbursed for expenses until after the care is provided.
- An eligible dependent care expense can be claimed on your income tax return or reimbursed from your FSA — but not both.
- Be sure to anticipate any time when you will not incur dependent care expenses, such as family vacations, school breaks, etc., or a time when your expenses will change, such as when your child reaches school age.
- Keep in mind you may only claim dependent care expenses for children age 12 and under. For example, if your 12-year-old child turns 13 in March, expenses incurred after March will not be reimbursable.
The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.