Dependent Care Reimbursement Account

You can establish a dependent care reimbursement account by authorizing a reduction in your taxable salary by an amount up to $5000 a year. This amount is then used to pay eligible dependent care expenses. Because this amount goes into the account before income or Social Security taxes are withheld, you save money by paying less in taxes. To be eligible, expenses must satisfy all of the following:

• You must be gainfully employed;
• Expenses must be incurred for a child under age 13 whom you are entitled to claim as a dependent on your federal tax return, or for a dependent physically or mentally incapable of self care who regularly spends at least eight hours each day in your household. (Special rules apply to a child of separated or divorced parents. Please see plan description available from Human Resources.);
• Expenses must be for household services or for outside care of an eligible dependent. (Please note: if you use a dependent care center that provides regular care for at least seven people and receives a fee for such services, the center must comply with all applicable laws and regulations); and
• Expenses must be incurred between January 1 and December 31 of each year and claims for reimbursement must be submitted by the following April 15.

Maximum Account Amount

Your account may not exceed $5,000 or any of the following:

• $2,500 if you are married but do not file a joint income tax return;
• Your earned income for the calendar year; or
• If you are married and file a joint income tax return, either your earned income or the earned income of your spouse, whichever is less for the calendar year.

Applying for Reimbursement

Send dependent care expense receipts as you receive them, along with a completed reimbursement request form (available in Human Resources or online at http://www.wesleyan.edu/hr/forms) to Human Resources. You will be reimbursed on a monthly basis for expenses up to your accumulated deductions.

Unused Account Amounts

IRS regulations for dependent care reimbursement accounts include a "use-it-or-lose-it" provision. This means you forfeit any funds not used to cover eligible expenses incurred during the plan year. You can reduce your risk of loss by careful planning and by limiting your contributions to predictable dependent care expenses.