Business Services

Human Resources Employee Benefits

DEPENDENT CARE FSA

Up to $5,000 per year maximum

This account enables you to pay for child and elder care costs incurred so that you and your spouse may work or attend school full-time.  Single employees can also use the account.  An eligible dependent is someone for whom you can claim expenses on Federal Income Tax Form 2441 “Credit for Child and Dependent Care Expenses.” Children must be under age 13.  Other dependents must be physically or mentally unable to care for themselves.  Examples of qualifying dependent care arrangements include care in or outside your home, preschool tuition, before and after school care, and many summer day camps.  Employees are advised to contact TRI-AD to make sure the dependent care expenses qualify and appropriate documentation is provided for reimbursement.

Below is an example for a married employee with two exemptions and a family income of $100,000 per year who saved approximately $1,917.00 in taxes by creating $1,000 healthcare and $5,000 dependent care flexible spending accounts.   

 

Employee Tax Savings Without FSA With FSA
     
Total Gross Annual Wages $100,000.00 $100,000.00
Health Care FSA Expenses --- $1,000.00
Dependent Care FSA Expenses --- $5,000.00
     Taxable Annual Wages $100,000.00 $94,000.00
     
Income Taxes    
Social Security & Medicare $7,650.00 $7,191.00
Federal Income Taxes $13,430.00 $11,930.00
Dependent Care Credit ($600.00) ---
Earned Income Credit --- ---
State Income Taxes $4,324.65 $3,766.65
     Total Taxes $24,804.65 $22,887.65
     
Health Care Expenses $1,000.00 ---
Dependent Care Expenses $5,000.00 ---
After Tax Income $69,195.35 $71,112.35
     Annual Tax Savings --- $1,917.00

 

General Information

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