Frequently Asked Questions
- Who is eligible to use the Dependent Care Spending Account?
- Who is considered a dependent for reimbursement?
- What is the maximum or minimum I can contribute to my account?
- What if the family care provider does not claim the income as earnings?
- Do I need receipts in order to receive reimbursement?
- Does my dependent care provider have to meet any special requirements for me to participate?
- Can I receive the full amount of my day care expense?
- Must I pay a bill first and then be reimbursed later?
- Are there any government forms to complete?
Who is eligible to use the Dependent Care Spending Account?
To be eligible, a member must be at work during the time the eligible dependent receives care. Members must meet one of the following requirements:
- Be a single parent.
- Have a working spouse.
- Have a spouse who is a full-time student at least five months during the year while the employee works.
- Be divorced or legally separated and have custody of the child most of the time even though the former spouse may claim the child for income tax purposes.
Who is considered a dependent for reimbursement?
An eligible dependent must spend at least eight hours a day in the home of the member and be one of the following:
- A child under age 13 and in the custody of the member.
- A spouse who is physically or mentally unable to care for him or herself.
- A dependent that is physically or mentally unable to care for him or herself, even if the person is not claimed as an exemption for income tax purposes.
- Elderly parent if you are the sole caregiver.
In addition, a dependant must meet the definition of a dependant according to section 152 of the IRS code.
What is the maximum or minimum I can contribute to my account?
The IRS maximum is $5,000 per family ($2,500 for married couples filing separate returns) for dependent care reimbursement.
What if the family care provider does not claim the income as earnings?
In order to receive reimbursement, the Social Security or tax ID number of the care provider must be provided on the federal income tax return. As a result, the provider will have to pay taxes on that income.
Do I need receipts in order to receive reimbursement?
Yes, dependent care reimbursement requests require a receipt or a personal statement itemizing charges from the provider. In addition, the statement must include the provider’s name, tax identification number or Social Security number, date(s) of service, amount charged, and the name of the person receiving the service.
Does my dependent care provider have to meet any special requirements for me to participate?
The documentation submitted to Blue Cross must include the Social Security number or tax ID number and a signature or formal documentation from the dependent care provider. When completing the IRS form 2441 for filing your income tax return, you must give the ID number of the dependent care provider.
Can I receive the full amount of my day care expense?
Your payroll deduction amount is the maximum amount you can receive from your Dependent Care Account. If your expense is greater than the payroll deduction amount, you will only receive reimbursement for the payroll deduction amount. The expense over the deduction amount will be credited and reimbursed to you after the next payroll deduction.
Must I pay a bill first and then be reimbursed later?
Yes, under the Dependent Care Account an expense must be incurred and paid before it is reimbursable.
Are there any government forms to complete?
Yes, an employee must complete the IRS form 2441 or the 1040A when completing income tax returns if they participate in the Dependent Care Account.