A Dependent Care Reimbursement Account reimburses you for daycare expenses for eligible children and adults. Through regular payroll deductions, you set aside part of your income to pay for these expenses on a tax-free basis.
To qualify, your dependents must be:
- a child under the age of 13, or
- a child, spouse or other dependent who is physically or mentally incapable of self-care and spends at least 8 hours a day in your household.
Qualified expenses for reimbursement include — adult and child daycare centers, preschool and before/after school care.
Please note: A dependent care credit is available on your annual tax return. Whether or not to participate in the daycare portion of this plan depends on your income, filing status, number of dependents and annual daycare expenses. You will also receive your tax savings throughout the year, rather than once a year when you file your taxes. Contact your tax advisor for further guidance.