A Dependent Care Account allows you to allocate money on a pre-tax basis to reimburse yourself for dependent care services such as after school care and dependent daycare centers.
Minimum Annual Deposit: $240
Maximum Annual Deposit: $5,000
Partial list of Eligible Dependent Care Expenses:
- After-school care or extended day programs
- Nanny expenses
- Baby-sitter inside or outside participant's household
- Custodial or elder care expenses if the qualifying individual still spends at least 8 hours each day in the employee's household
- Dependent care center* expenses/pre-kindergarten/nursery school expense if primary purpose is to care for the child so the parent can work
- Expenses paid to a non-dependent relative of participant
- Summer day camp if the primary purpose of the expense is custodial in nature and not educational
*A dependent Care Center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment or grant for providing services for any of those persons, regardless of whether the center is run for profit.
For a complete list of eligible expenses, visit https://americanfidelity.com.
Taxpayer Information
Regardless of whether you participate in the dependent care plan under Section 125 or claim the credit on your income tax, you must provide the IRS with the name, address, and taxpayer identification number (TIN) or Social Security number of your dependent care provider(s) by completing either Schedule 2 of form 1040A or Form 2441 and attaching it to your annual income tax return. Be sure that you follow the current instructions given by the IRS for preparing your annual income tax return. Failure to provide this information to the IRS could result in a loss of the pre-tax exemption for your dependent care expenses.