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Dependent Care Reimbursement
Child Care Tax Credit & Dependent Care Account Management
Reduce the cost of dependent care
paid by your employees while they're working by offering a Dependent
Care Reimbursement Account. AmCheck can set up and administer your
plan.
Employees choose to have an amount up to $5,000 transferred annually
their gross paycheck, before taxes are taken out, and put into a
Dependent Care Account to pay dependent care expenses, which include
child day care, in-home dependent care, nursery school and adult
day care. If the employee qualifies for the Child Care Credit, the
same IRS rules apply. However, the IRS has set additional requirements,
and leftover money cannot be returned.
To get reimbursed, employees simply submit their documentation
along with a signed reimbursement request, and they receive a tax-free
check.
The IRS sets a maximum allowable contribution for Dependent Care
Reimbursement FSA at $5,000 per family for a married couple filing
jointly, or for a single parent. The limit is $2,500 for a married
person filing separately. To qualify, the employee and his/her spouse
must be employed or actively seeking employment or attending school
full time. Child care expenses paid during a sick leave, holiday,
or vacation are not eligible.
Expenses must be for the care of a qualified
person, which is defined as one of the following:
- A child under 13 years old who is a dependent for income tax
purposes. If the child turns 13 during the plan year, expenses
are no longer eligible for reimbursement. Contributions must continue
throughout the year, so employees should plan carefully.
- A spouse or dependent who is incapable of self-care and regularly
spends at least eight hours per day in your home (i.e., an invalid
parent). The same rules that apply for child care apply to the
care of other dependents, except that the dependent need not be
under age 13.
- The services may be provided in your home or another location
but not by someone who is your minor child or dependent for income
tax purposes (i.e., an older child).
- If the services are provided by a day care facility that cares
for six or more children at the same time, the facility must comply
with state day care regulations.
- Services must be for the physical care of the child, not for
education, meals, etc.
AmCheck offers nationwide dependent care reimbursement
account credit, get a quote.
For more information on AmCheck's dependent
care reimbursement account credit, contact an AmCheck dependent
care reimbursement account credit specialist at 1-888-AMCHECK.
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