Dependent Day Care FSA

  • Important note regarding your FSA 

    Your 2020 FSA card will continue to work after Jan. 1, 2021. Claim forms can be found under 2020 forms on the Benefits website at www.HISDBenefits.org. The IRS has extended the deadline for employees to use pre-tax funds set aside through their 2020 flexible spending accounts to Dec. 31, 2021. The extension is possible because of federal legislation passed late last year due to COVID-19. You may contact Payflex at 888-678-8242 or visit Payflex.com for any FSA questions.

    Pre-tax dollars used for day care

    • A dependent day care FSA lets you set aside pre-tax dollars to cover expenses for your child(ren) or other qualifying person so that you and your spouse can work or look for work.
    • You and your spouse can contribute a combined total of up to $5,000 per calendar year through automatic payroll deductions.
    • Since your contribution is pre-tax, it takes less out of your paycheck.
    • If you join HISD after January 1, 2021, your deductions are allocated over the remaining pay periods.
    • Aetna administers the plan starting January 1, 2020.
    • You have to re-enroll each year. 

    Requirements
    Eligible expenses must meet certain requirements. 

    For dependents ages 12 and under

    • You must be able to claim an exemption on your federal income tax return for the child, or you must be a parent who has custody for a longer time during the year than the other parent, even if you cannot claim a dependent exemption.
    • A relative can provide the care, unless the relative is your spouse, child or stepchild under the age of 19, or a relative that you can claim as a dependent on your federal income tax return.
    • If the care is given by a day care center (a center that cares for more than six individuals), that center must comply with all applicable state and local day care regulations.

    For dependents ages 13 and over

    • The individual must be your dependent for federal income tax purposes and must be physically or mentally incapable of self-care.
    • The dependent must live with you.
    • The care may be given outside the home if the dependent regularly spends at least eight hours per day in your home. The dependent day care center must care for more than six individuals and must comply with all applicable state and local day care regulations.

    What your dependent day care FSA covers
    Payments to nursery schools, daycare centers and eldercare facilities are eligible. So are payments for before- and after-school care and summer day camp for children up to age 13. Overnight camp expenses are not eligible.

    Important: You can't use this account to pay for dependent medical expenses.


    Restrictions

    In return for the favorable tax advantages, the IRS has strict rules on these accounts.

    • You can’t change the amount you contribute until the next plan year, unless you have a qualified life event
    • You can’t transfer money from this account to another FSA account
    • To be reimbursed, you must be enrolled in the FSA when you incur expenses
    • You may use your 2020 FSA funds for expenses incurred through March 15, 2021, and you have until May 15 of that year to submit documentation for those expenses
    • You forfeit any leftover funds in the account

    Determining your contribution
    Estimate the amount of your upcoming expenses using the Dependent Care Flexible Spending Account Worksheet. Remember to subtract holidays, vacations and other times you may not need to pay for eligible child(ren), adult or elder care. Also consider whether any dependents will lose dependent status during the year, for example, if a healthy dependent child is turning 13.