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Dependent Day Care Reimbursement Account

This account reimburses you for eligible child and adult care expenses including care provided in your home by a paid provider or outside your home by a licensed nursery or day care center.

The Benefit

You may reimburse yourself or an eligible dependent with before-tax dollars for certain out-of-pocket expenses. Eligible dependents include children under age 13 who are claimed as a dependent on your income tax return or any dependent who you claim for income tax purposes that requires day care because of physical or mental inability. By paying for expenses on a before-tax basis, you reduce your income for the purpose of state, federal and Social Security taxes.

How it Works

You estimate how much you expect to spend on unreimbursed day care expenses for the calendar year and have that amount withheld pre-tax from your paychecks throughout the year in equal weekly or monthly amounts. You may either pay for your qualified expenses using the HealthHub / PayFlex Card at the point of service or you can file a claim (online, by paper, or by fax). Claims are processed daily. You have until March 31 of the following calendar year to submit claims for expenses incurred. The account has a use-it-or-lose-it rule. You forfeit any unused funds at the end of the plan year.

How to Enroll

New employees sign up for coverage by completing an enrollment form within 30 days from your first day of employment. All other eligible employees may sign up for coverage during the Open Enrollment period. You may also be eligible to sign up for coverage if you have a Qualifying Event. You may contribute from a minimum of $300 to a maximum of $5,000 each calendar year. If you are single or if you are married and file separate income tax returns, the maximum you may contribute is $2,500 (subject to change each year). You may only change your contribution during the Open Enrollment period or if you experience a Qualifying Event. To continue your coverage, you must re-enroll during each Open Enrollment period.

Reimbursable Expenses

You can be reimbursed for many expenses incurred by you or your eligible dependents that the IRS allows as income tax deductions, but not all items that qualify as a tax deduction also qualify for the reimbursement account. Eligible expenses include but are not limited to:

  • Care of a dependent in your home by a paid provider
  • Care of a dependent outside your home by a licensed nursery, or day care center
  • Household services, such as a housekeeper, provided some portion of the service is to a dependent.

Use IRS Publication 503 (PDF) as a guide, but not all items that qualify for a tax deduction also qualify for the reimbursement account. For additional information, contact PayFlex customer service at the number shown at the top of this page.