How to Use a Dependent Care Spending Account. Dependent Day Care Flexible Spending Accounts are a fantastic way to recoup some of the tremendous expenses of child care. This account is set up using pre-taxed dollars that you can reclaim anytime throughout the calendar year. There are a few things to be aware of and using the steps below, you can use this account to the maximum benefit.
Determine Your Needs
Review the amount of money you are currently spending on day care. Remember to calculate the increase in summertime day care fees for school-aged children.
Consider any upcoming changes, such as babies turning two or children beginning school, as those milestones do lower the cost of child care.
Review your commitment to your current company. If you plan on making a career change, you will not receive the full benefit of a dependent day care spending account.
Decide upon the annual amount you want to contribute. The maximum annual amount is $5000.00. The amount you select will be divided by the number of remaining pay checks in the current calendar year. That amount will be taken from your gross pay prior to taxation.
Set Up your Dependent Day Care Flexible Spending Account
Contact your HR representative to obtain the paperwork to begin utilizing this benefit. You may be able to locate the paperwork on your employer's website.
Fill out the paperwork completely. Ask for clarification from your HR representative if you have any questions or concerns. This will help insure that the paperwork is correct and avoid any delays. Make a copy for your own records.
Return the documents to the proper place. Make note of the date so you can expect when to see the deductions on your pay check.
Obtain a receipt from your day care provider. If their system is computerized, they can print out the receipts for specific dates, making it easier to track your claims.
Ask for the Federal ID number for your day care. If you do not have this information, you will need to have your day care provider sign the claim form and fill in her social security number.
Attach the receipts to the claim form, making sure you have copies of all of the paperwork for your own record keeping.
Send the completed claim form along with the receipts to the proper location, typically listed at the bottom of the claim form.
Note the date you made the claim so you can watch for payment; most payments are made via direct deposit.
You are not able to claim more than you have deposited into your Dependent Day Care Flexible Spending Account.
You must claim the money using receipts from the same calendar year. Claim all your money prior to March 15th of the next calendar year, as any money left in the account after that date is forfeited. Understand the rules of the day care account fully. There are many situations that do not allow you to file claims, such as an unemployed spouse providing child care or child care for a child over the age of 13. Investigate your situation prior to beginning to contribute.