Dependent Care Flexible Spending Account
A participant can set aside money on a pre-tax basis to pay for eligible dependent care expenses for qualified dependents. These expenses must be necessary in order for a participant (and spouse, if married) to work. The amount that can be set aside each year is a minimum of $100 up to:
- $5,000* if the participant is single, or married and filing tax returns jointly;
- A total amount of $5,000* together if the participant's spouse has a dependent care Flexible Spending Account through his or her company (i.e., the amount set aside by the participant under the Leidos Dependent Care Flexible Spending Account and their spouse under his or her company’s Dependent Care Flexible Spending Account cannot together total more than $5,000); or
- $2,500* if the participant is married but files separate tax returns.
* These are the maximum contributions allowed for dependent care expenses under current IRS rules.
If a participant or spouse earns less than $5,000, the combined amount that the participant and spouse can contribute may not exceed the amount of the lower salary.
Important: Participants must make an annual election each year. Dependent Care Flexible Spending Account elections do not automatically roll over into the next plan year.
Under the Dependent Care Flexible Spending Account, a qualified dependent is:
- A child under age 13 whom the participant claims as a dependent on his or her federal income tax return;
- A participant's spouse who is physically or mentally incapable of self-care; or
- Any other dependent who is physically or mentally incapable of self-care, whom the participant claims as a dependent on his or her federal income tax return, and who normally spends at least eight hours in the participant's home each day.
Once enrolled in the Dependent Care Flexible Spending Account, a participant generally may not change the amount he or she contributes to the account, unless the participant experiences an IRS-qualified status change.
However, a participant may change the amount he or she contributes when there is a change in providers, a change in child care or adult care costs or a general change in his or her care situation.
Expenses
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Generally, any dependent care expense that the IRS allows as a deduction on income tax returns is eligible for reimbursement, provided it is not reimbursed from any other source. This includes expenses incurred for anyone a participant is entitled to claim as a dependent on his or her tax return, regardless of whether that dependent is covered under Leidos' medical, dental or vision plans.
Expenses for registered domestic partners and dependent children of registered domestic partners are not eligible for reimbursement under the Leidos Dependent Care Flexible Spending Account.
For a detailed list of eligible dependent care expenses, please refer to IRS publication 503, (called "Child and Dependent Care Expenses") available from your local IRS office, or visit the IRS website.
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Below are examples of ineligible dependent care expenses. This list is meant to provide only a summary of ineligible expenses:
- Expenses for food, clothing or education (unless incidental to the care);
- Expenses for overnight camp;
- Expenses for transportation between a participant's house and the place that provides day care services, or the cost of transportation for a care provider;
- Expenses for dependent care when either the participant or his or her spouse is not working or is not looking for work;
- Charges for convalescent or nursing home care for a parent or a disabled spouse;
- Expenses paid to the spouse, a participant's own children under age 19, or any other dependents; and
- Expenses for which a federal child-care tax credit would be taken.
As noted above, for a detailed list of eligible dependent care expenses, please refer to IRS publication 503, (called "Child and Dependent Care Expenses") available on the IRS website (www.irs.gov).
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Another way to reduce dependent care expenses is to take a tax credit when filing an income tax return. However, a participant may not take the tax credit for any expenses reimbursed through the Dependent Care Flexible Spending Account.
With the tax credit, a participant can claim a deduction for a percentage of eligible dependent care expenses (the same expenses as defined for the Dependent Care Flexible Spending Account Account (see "Eligible Dependent Care Expenses" above)). The total expenses that you may use to calculate the credit may not be more than $3,000 (for one qualifying individual) or $6,000 (for two or more qualifying individuals).
The tax credit percentage applied to eligible expenses decreases as a participant's adjusted gross income rises. Generally, if a participant's family income is greater than $24,000 per year, the Dependent Care Flexible Spending Account may save more in taxes than the child care income tax credit. However, the advantages of the Flexible Spending Account or the tax credit depend on a participant's overall tax situation and should be discussed with a tax adviser.
Reimbursement
Participants must pay for eligible dependent care expenses, save the receipts, then file a claim for reimbursement from their accounts. Unlike with the Health Care Flexible Spending Account, a participant may receive reimbursement only up to the balance available in his or her account at the time the claim is filed.
Request Reimbursement — Participants will be able to withdraw funds from their health care flexible spending account online via the HSA Bank member portal. As part of the online process, they can upload the backup documentation and link it directly to the claim. Most claims are processed within a few days after they are received and payments are sent shortly thereafter. Participant will receive a check in the mail if they do not set up their direct deposit information with HSA Bank. To set up your direct deposit, contact HSA Bank.
You also have the option to complete a paper claim form and submit it directly to HSA Bank for reimbursement. The participant can submit their claim form, by downloading the Dependent Care Flexible Spending Account claim form and emailing it to [email protected] or mailing it to:
HSA Bank
P.O. Box 2744
Fargo, ND 58108-2744
- Pay Provider Online — Participants can pay many of their eligible dependent care expenses directly from their flexible spending account without filling out paper claims forms. Just enter the provider’s name and other requested information with the backup documentation and payment will be sent directly to the provider.
Unlike with the Healthcare Flexible Spending Account, a participant may only receive reimbursement up to the balance available in his or her account at the time the claim is filed.
If participants have concerns about how a claim has been administered, or wish to appeal a claims decision, information on relevant procedures is available in the Plan Information section of the SPD website.
If You Leave the Company
If you leave the Company during the year, any contributions you are making will stop and you have until April 30 of the following plan year to submit claims for reimbursement for any remaining Dependent Care Account balance. However, you will not be reimbursed for any eligible expenses incurred after your date of termination.