Flexible Spending Accounts (FSAs)
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This may be one of the best years to take advantage of the tax-savings benefit of a Flexible Spending Account (FSA). FSAs allow you to contribute pre-tax dollars that you expect to spend on qualified expenses into the account and therefore lower your taxable income. There are two types of FSAs offered:
- Health Care—for out-of-pocket health care expenses
- Dependent Care—for costs of adult or child care that enable you (and your spouse) to work
When considering the Health Care account, estimate costs for co-payments of prescription drugs and doctors visits for yourself and your family members. You don’t have to participate in Henrico County health care or dental coverage to participate in a FSA and your family members do not have to be covered by Henrico County’s plans for you to be reimbursed for their eligible expenses.
When considering the Dependent Care account, review costs for child care services for dependent children under the age of 13. This account may also be used if you have expenses for adult care services. Eligible child or adult care expenses are those that you incur when you are working and that enable you (and your spouse) to work.
Annual contribution limit:
$2.500 for Health care FSA
$5,000 for Dependent Care (Day Care) FSA
- 2013 FSA Enrollment Guide
- 2013 Benny Card / Direct Deposit Authorization Form
This paper form is required for you to receive a debit card or have your reimbursements direct deposited.
- 2013 Benny Card Overview
- 2013 Benny Card FAQs
- 2013 FSA Eligible Expenses
- 2013 FSA Claim Form
- Daycare FSA Receipt for Service – Use this form if your daycare provider does not offer formal receipts.
Flex-Plan Services: 1-800-669-3539 (10 a.m. – 8 p.m. Monday-Friday)
The Dependent Care FSA helps you pay for child care services that make it possible for you and your spouse (if applicable) to work. Under certain circumstances it also may be used to help pay for the care of elderly parents, or a disabled spouse or dependent.
Am I eligible to enroll in the Dependent Care FSA?
To be eligible you must be at work during the time you’re eligible dependent receives care. You must also meet one of the following eligibility guidelines:
- You are a single parent or guardian.
- You have a working spouse or a spouse looking for work.
- Your spouse is a full-time student at least five months during the year while you are working.
- Your spouse is physically or mentally unable to provide for his/her own care.
- You are divorced or legally separated and have custody of your child even though your former spouse may claim the child for income tax purposes.
Who is an eligible dependent?
Your dependent care expenses must be for a qualifying individual who spends at least eight hours a day in your home and is one of the following:
- You’re dependent under the age of 13 for whom you can claim an exemption.
- A child under the age of 13 for whom you have custody if you are divorced or legally separated.
- Your spouse who is physically or mentally incapable of self-care.
- You’re dependent who is physically or mentally incapable of self-care, even if you cannot claim an exemption for the person for income tax purposes.
What expenses are eligible for reimbursement under the dependent care FSA?
Expenses may be reimbursed for services provided:
- Inside or outside your home by anyone other than your spouse, a person you list as your dependent for income tax purposes or one of your children under the age of 19.
- In a dependent care center or a child care center. (If the center cares for more than six children, it must comply with all applicable state and local regulations).
- By a housekeeper whose services include, in part, providing care for a qualified individual.
Child and adult daycare, nursery and pre-school, after-school programs, and summer day camp for eligible dependent care can be reimbursed through the Dependent Care FSA.
What expenses are not eligible for reimbursement?
- Dependent care for a child 13 or over.
- Overnight camp.
- Babysitting that is not work-related.
- School costs for kindergarten and higher grades.
- Long-term care services.
- All submitted expenses will be reviewed according to the regulations of Internal Revenue Code Sections 125 & 129.
Can I pay my in-home daycare provider through the Dependent Care FSA?
Yes. You can be reimbursed from your Dependent Care FSA for any qualified daycare expense, whether performed in your home, the provider’s home or a daycare center. The caregiver’s Social Security number or a tax identification number must be included on the Claim Form. You will also need to provide receipts for the expenses or have your provider sign the completed Claim Form.
My dependent care provider doesn’t claim the income as earnings. Can I use the dependent care account?
You can, but you will need to report the Social Security or tax identification number of your provider, along with the amount paid and benefits received, on form 2441 to accompany your federal income tax return. As a result, your provider will have to pay taxes on that income.
My ex-spouse claims our child as a deduction for tax purposes, but I pay for child care. Can I use the dependent care account?
During the time of the year the child resides with you, you can use the dependent care account to pay for child care services.
Can I use both the Dependent Care FSA and the federal Child and Dependent Care Credit?
Expenses reimbursed from a Dependent Care FSA reduce the amount you can claim under the federal income tax credit. You will have to determine which approach is best for you. Keep in mind the tax savings derived through participation in a Dependent Care FSA are realized throughout the plan year versus once on April 15.
The Health Care FSA helps you save money on your out-of-pocket health care expenses. By using an FSA, you pay for these expenses with pre-tax dollars. You save a percentage of each dollar you spend on eligible medical, dental and vision services that are not fully covered or are ineligible for payment under your health care plan.
What is eligible for reimbursement under the Health Care FSA?
Eligible health care expenses may include health care plan deductibles, copayments, and some over-the-counter medications if a prescription is obtained from your physician. A list of reimbursable expenses is available on the Flex-Plan Services Web at www.flex-plan.com. All submitted expenses will be reviewed according to the regulations of the Internal Revenue Code Section 125. Insurance premiums and expenses paid by your health care plan are not eligible for reimbursement under the Health Care FSA.
If I don’t have any medical insurance through my company, can I still participate in the Health Care FSA?
Yes. Out-of-pocket expenses for you and your dependents are eligible for reimbursement whether or not you are insured through your company, but you must enroll in the health care FSA to take advantage of the tax savings.
Can I use my Health Care FSA for my family’s expenses?
Yes. You can be reimbursed for eligible health care expenses incurred by you, your spouse or any dependent that you claim on your income tax returns, even if they are not covered under your health care plan.
What if I itemize my health expenses on my tax returns?
You cannot receive reimbursement from an FSA for an expense and also itemize the expense as a tax deduction on your tax returns. However, most people do not incur enough out of pocket expense to be eligible for any deduction on their tax return. For individuals that do not qualify for the itemized deduction, the Health Care FSA makes sense—it’s available for any amount up to your company’s maximum. Plus, you receive the tax savings throughout the year, not when you file your taxes after the end of the year.
What if I still have money left in my account at the end of the year?
You lose the money left in your account at the end of the year. To avoid losing any money, plan carefully and review your account before the end of the plan year. If you have money left, you or your dependent(s) might want to schedule an eye exam, an annual physical, or purchase additional monthly prescriptions prior to the end of the year.
How do I get reimbursed for my eligible expenses?
You can submit claim forms and receipts by fax or mail to Flex-Plan or use your debit card for reimbursement. Visit the Department of Human Resources Web site for the FSA claim form and information about using your Benny Card.