Benefits - Flexible Spending Account

Benefits

Flexible Spending Account - Dependent Care

SU offers employees the opportunity to contribute pre-tax dollars to a Dependent Care Flexible Spending Account administered by EBS-RMSCO.

The Dependent Care Flexible Spending Account allows you to set aside pre-tax dollars for eligible dependent care expenses. The advantage of a pre-tax Dependent Care Flexible Spending Account is that you do not pay any federal, state, or social security (FICA) taxes on the money you contribute to it. Your contributions will automatically be deducted in equal installments from your paychecks before taxes are calculated. The taxes you save and the effect on your paycheck will depend on your personal situation (e.g., your household income, tax bracket, and the amount you contribute to the account).

You must enroll annually in the Dependent Care Flexible Spending Account during Open Enrollment. Each year, you elect the amount of pre-tax contributions that you wish to make to the account. You are not permitted to carry forward contributions made in one plan year to a later plan year. Any remaining balance in the account at the end of the plan year will be forfeited. Therefore, it is important that you estimate your dependent care expenses carefully before electing your contribution amount. The benefit year runs from January 1 to December 31 (see Important Note below).

The Dependent Care Flexible Spending Account offers tax savings on eligible child and elder care expenses provided by qualified caregivers.

Qualifying expenses may only be reimbursed for the care of one or more "qualifying dependents." In general, a "qualifying dependent" is either (1) an eligible dependent under the age of 13, or (2) a spouse or eligible dependent, regardless of age, if that individual is physically or mentally unable to care for himself or herself.
If services are provided by a dependent care center, the center must be licensed by New York State or an appropriate government agency and meet certain other requirements.
If services are provided by an individual, you must supply the caregiver's social security or taxpayer identification number when submitting claims for reimbursement, as well as any other information required by the Plan Administrator to assure that the expenses are properly reimbursable. Expenses are not reimbursable if, among other things, the care provider is the dependent of you or your spouse, or is your child and is under the age of 19 at the end of the plan year.
You generally can contribute up to $5,000 per household annually to this account. (The maximum limit is $2,500 for married individuals filing separate returns.)

Keep in mind that in January you will be making your regular dependent care payments but your account will not yet be funded. You cannot request reimbursement from the Dependent Care Flexible Spending Account for more than has been deposited into it.

Reimbursement Process

You incur eligible expenses and pay bills as you normally would.
EBS-RMSCO administers the Dependent Care Flexible Spending Accounts.
You submit the claim form, receipts, and any additional required information to EBS-RMSCO to request pre-tax reimbursements from your dependent care account.
You receive reimbursement from EBS-RMSCO.
You will have until April 30, 2009 to submit claims for expenses incurred between January 1, 2008 and December 31, 2008. Checks are cut once per week if expenses submitted total $25 or more. In the month of December, the $25 minimum is waived and all expenses submitted are reimbursed weekly.

Should you terminate or otherwise become ineligible for benefits during the calendar year, you will have 90 days after the date of termination or ineligibility to submit eligible expenses for reimbursement.

IMPORTANT NOTE: IRS regulations require that you use all of the money in your Flexible Spending Account for eligible expenses incurred in the calendar year during which the contributions are made or you will forfeit any funds remaining in the account. Dependent care expenses are considered to be "incurred" when the qualifying dependent care is provided, and not when you are billed for or pay for the dependent care expenses.

Employees electing to participate in the Dependent Care Flexible Spending Account are bound by the terms of the governing Plan document. If you have any questions regarding the Dependent Care Flexible Spending Account, you may request a copy of the Plan document by contacting the HR Service Center at the number indicated at the end of this page.

As is the case with all benefits offered by SU, (1) the Plan Administrator has the discretionary authority to interpret the terms of the Plan and such interpretation will be binding on all interested parties to the fullest extent permitted by law, and (2) the University reserves the right to modify or terminate the Plan at any time.

Before you decide, consider the following:

Do you pay for child or elder care so that you and/or your spouse can work or attend school full time?
Will a Dependent Care Flexible Spending Account be more cost-effective than the federal child care income tax deduction? Amounts reimbursed from your Dependent Care Flexible Spending Account will reduce the amount of your available federal child care income tax deduction. Review your individual income tax circumstances carefully before deciding which method saves you more money.

Helpful Links

Need help? HR staff is available to assist you. Call the HR Service Center at 315-443-4042, or e-mail hrservic@syr.edu.