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Dependent Care Reimbursement Plan
What is the dependent care assistance program?The dependent care assistance program assists in funding eligible child care expenses and certain costs associated with the care of a dependent child, spouse, or parent. Participants make pre-tax contributions by payroll deduction and the contributions are allocated to an account maintained on the participant's behalf by AURA/NOAO. After paying an eligible out-of-pocket expense, tax-free reimbursement will be processed following submission of a claim. The result of paying for dependent care expenses through the FSA plan may be lower income taxes and often an increase in take-home pay.How does the dependent care assistance program work?After you enroll, the dependent care assistance program works like this:
Must I enroll every year to continue participation in the dependent care assistance program?Yes, an individual must submit a completed enrollment form to Human Resources in order to continue participation in the dependent care assistance program.How much can I contribute to my dependent care account?The IRS limits the amount you can contribute to the program.You may contribute an amount up to the lesser of:
These limits apply whether you are single or married. If your spouse is also eligible to participate in an employer's dependent care assistance plan, your combined contributions should not exceed the above maximums. (This also applies if both you and your spouse are NOAO employees.) The IRS does not consider you married for purposes of the Dependent Care program if you:
If your spouse is incapable of self-care or is a full-time student, his or her earned income is considered to be $200 per month if you claim one dependent, or $400 per month if you claim two or more. To be considered a full-time student, your spouse must attend school for at least five months of the year and may not be exclusively a night student. Can I change the contribution amount at a later date?Yes, IRS regulations state that an individual may change or stop his or her FSA contributions only within 31 days from the date of a qualified change in family status such as marriage, birth of a child, or divorce.What is an eligible change in status?IRS regulations state that an individual may change or stop his or her FSA contributions only within 31 days from the date of a qualified change in family status such as:
When may I enroll in the dependent care assistance program?Employees must enroll in the dependent care assistance program within 31 days from the date of employment or during Open Enrollment (usually December).Employees must complete an enrollment form and submit the completed enrollment form to Human Resources in order to participate in the plan. How do I file claims?After an individual has paid for an eligible expense, he or she must submit a claim for reimbursement from his or her FSA account. An individual must complete a FSA claim form, available either online or from Human Resources, and submit the completed form along with receipts or other required documentation to Mountain States Adminstrative Services (MSAS).Required documentation for reimbursement from the dependent care account must include either the social security number or federal tax identification number of the childcare provider. Individuals participating in the dependent care assistance program may be reimbursed only up to the amount in his or her account. The deadline for submitting reimbursement claims for the FSA health and dependent care assistance program for the 2005 calendar year services is the end of February 2006. Any monies remaining in a participant's account as of March 1, 2006 are forfeited in accordance with IRS regulations. How is reimbursement payment made?When the claim is submitted and approved, you will be reimbursed up to the amount in your dependent care account for your eligible expenses. Claims are processed weekly and paid with normal payroll on payday.
What is the deadline for submitting claims?When the claim is approved, you will be reimbursed the full amount of your eligible expenses, up to your Healthcare FSA annual election. Claims are processed weekly and mailed to your home address or deposited into your bank account (if direct deposit is elected).The deadline for submitting reimbursement claims for the FSA health and dependent care assistance program for the 2005 calendar year services is the end of February 2006. Any monies remaining in a participant's account as of March 1, 2006 are forfeited in accordance with IRS regulations. Which expenses are eligible?Dependent care expenses must meet the statutory requirements of IRC sections 21 and 129. For more information, refer to IRS Publication 503 or consult your tax adviser.A reimbursement can only be issued after you have actually received the qualified services. You will receive payment for services received to date as of the date the claim is submitted, up to the amount available in your account. The balance of your claim will be held until the services have been received. The dependent care must be necessary so that you or you and your spouse can work or look for work (you must have work income during the year). If care is provided in a day-care center, the center must charge a fee. If the center cares for six or more dependents who are not residents, it must comply with all state and local licensing laws and applicable regulations. Expenses must be incurred during the dependent care plan year January 1 through December 31. 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. If you enroll midyear, expenses incurred before your effective date are not eligible. NOTE: Expenses claimed under the Dependent Care Assistance Program may not be applied toward the dependent care tax credit on your income tax return.
Eligible Expenses: A Partial List
Ineligible Expenses: A Partial List
Which dependents are eligible?Qualifying dependents are:
What happens to dependent care funds I don't use?All eligible funds must be for services provided during the period contributions are made and must be claimed by the end of February. Under IRS regulations, any monies not claimed from the dependent care account as of March 1st are forfeited. Any forfeited funds are used by AURA/NOAO to pay the cost of administering the dependent care assistance program. Therefore, careful planning of projected dependent care expenses is essential.
What if I separate from employment?Individuals participating in the FSA Dependent Care Reimbursement Plan may only seek reimbursement for eligible dependent care expenses incurred during the period contributions are made. COBRA continuation provisions do not apply to the Dependent Care Account. An individual has until February 28th to file claims for the prior calendar year. Any outstanding balances on March 1st for the prior year are forfeited.Who do I contact if I have additional questions?
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