A Dependent Care FSA is an account that can be used to pay for the daily care of an eligible child or adult dependent as defined by the IRS. A Dependent Care FSA (sometimes referred to as a "Dependent Care Assistance Program," or simply "DCAP") is a type of FSA that allows an employee to get reimbursed for childcare expenses that enable the employee and his or her spouse to be gainfully employed.
What expenses are eligible?
What expenses are ineligible?
The DCAP contribution limit is the smallest of the following amounts: (1) $5000 for married individuals filing a joint return or for unmarried individuals; (2) $2500 for married individuals filing separately; (3) the employee's earned income; or (4) if the employee is married at the end of the tax year, the spouse's earned income. All limits are based on the employee's taxable year (i.e. the calendar year).
If your provider accepts debit cards, you can simply use your AmeriFlex Convenience Card to pay for the eligible expense. If, however, you are unable to use your debit card, you will need to file a manual claim. To file a manual claim for reimbursement from your DCAP, you must complete a Claim Form and submit it to AmeriFlex along with an itemized receipt. The itemized receipt must include the following information: the provider's name, the date(s) of service, the services rendered (e.g., daycare expenses), and the amount charged (not the amount paid). For DCAP claims, you must also include the provider's tax ID number or Social Security Number. After the claim has been processed, you will either receive reimbursement via check or direct deposit. To have your reimbursements deposited directly into your personal bank account, simply complete the Direct Deposit Form.
If you are filing a manual claim to get reimbursed from your DCAP, AmeriFlex makes it easy to get reimbursed automatically from your account as funds build up. Simply submit one Claim Form for the entire year that shows the date range for which services will be provided along with a note from the service provider outlining the schedule of expenses for the entire period of the recurring claim. Once your recurring claim has been processed, AmeriFlex will automatically reimburse you (via check or direct deposit) as funds in the account become available.
On your tax return, you must report the correct name, address, and taxpayer ID number (TIN) for your dependent care provider to claim exclusion for employer-provided dependent care assistance benefits or the dependent care credit. If your dependent care provider is exempt from federal income tax, you are not required to report the TIN on your tax return. However, you must still report the correct name and address of the exempt provider and write "tax-exempt" in the space provided for reporting the TIN.
If you participate in a DCAP, you cannot claim credits on your income tax return for the same expenses. Also, any amount reimbursed under a DCAP plan will reduce the amount of other dependent care expenses that you can claim for purposes of tax credits. Before you participate in a DCAP, you should evaluate whether the federal income tax credit will save you more money than the DCAP. If you are unsure about which option to choose, you should consult your tax or financial advisor.
Just like a medical FSA, any unclaimed DCAP funds remaining at the end of the benefit plan year are forfeited if not claimed/spent down within the plan year. Funds do not roll over from year to year. Also, like an FSA, DCAP elections are irrevocable, except in the event of certain changes in legal status such as marriage, divorce, etc.
No. Unlike medical FSAs, IRS guidelines dictate that DCAP funds are only available as they are accrued, per payroll deduction. AmeriFlex makes it easy to get reimbursed automatically, by filing only one claim form, so you will not have to file a claim each pay period. See above for details.
No. DCAP funds can only be used to pay for eligible expenses incurred in the current benefit plan year. Check with your HR administrator if you are not sure of your plan year dates.
Yes, but you may have to wait some time for the reimbursement. DCAP funds cannot be used to pay for care until the services have been rendered. This means that you cannot get reimbursed for the deposit until after your child begins camp.