Dependent Care Reimbursement Account

April 15 Deadline

Estimate your expenses carefully when deciding how much you want to contribute. You have until April 15 of the following year to submit your eligible claims for services received during the plan year (Jan. 1 - Dec. 31). Any money left in your account after April 15 will be forfeited, according to federal tax law. For help in estimating your expenses, refer to HealthEquity' helpful online tools for the Health Care Reimbursement Account or for the Dependent Care Reimbursement Account.

How Much Can I Contribute?

• The maximum contribution to your Dependent Care Reimbursement Account is $5,000 for the plan year. The minimum contribution is $130.
• If both you and your spouse have Dependent Care Reimbursement Accounts, your total combined contribution limit is $5,000 for the plan year.
• Your total contribution cannot be greater than your earned income or your spouse's earned income, whichever is lower.
• If your spouse has no earned income, you are not eligible for a Dependent Care Reimbursement Account. However, there are special rules if your spouse is a full-time student or is disabled. Contact HealthEquity at (877) 924-3967 for more information.
• If you are single with an eligible dependent, you can contribute up to the full $5,000 for the plan year.
• If you receive a subsidy from a Duke-contracted child care facility such as the Duke Children's Campus or The Little School at Duke, the amount that you can contribute to the Dependent Care Reimbursement Account is reduced dollar-for-dollar. See How to File a Dependent Reimbursement Care Account Claim for more information.
• Any money left in your Dependent Care Reimbursement Account at the close of the current plan year will be forfeited if you do not submit claims for expense reimbursement for dependent care services received during the current plan year (January 1- December 31) by April 15 of the following year.
• The Dependent Care Reimbursement Account Plan is required to complete annual testing to ensure compliance with Internal Revenue Code regulations. One test examines the participation rates in the plan by income levels. If participation rates are not in accordance with the regulations, your contribution amount may be adjusted. The Duke Benefits Office will contact you to provide notice in advance of any adjustment.

Use the Dependent Care Reimbursement Account Worksheet below or the HealthEquity calculator at wageworks.com/mydcfsa to help you decide how much to contribute.

Estimated Expenses for 2023

Who is Considered a Dependent?

Dependents are defined differently between the Health Care Reimbursement Account and Dependent Care Reimbursement Account.

• Children up to their 13th birthday, or other individuals whom you claim as a dependent on your federal income tax return - your spouse, parent, or child - regardless of age, who live with you and are incapable of caring for themselves, are dependents under the Dependent Care Reimbursement Account.
• Any other individuals you claim as dependents on your federal income tax return, regardless of age, who live with you and are incapable of caring for themselves. Expenses for same-sex spousal equivalents are not eligible for reimbursement, according to federal tax law.
• To check to see if you have a qualifying child or relative, answer the questions on this test.

If You Are Divorced or Legally Separated

If you are divorced, legally separated, or have lived apart from your spouse during the last six months, the parent who is able to claim your child as a dependent on his or her tax return is the custodial parent (the parent who has custody of the child for the greater portion of the calendar year). This parent can be reimbursed for the child's day care expenses through the Dependent Care Reimbursement Account.

Special Rules

There are some special federal tax guidelines you need to keep in mind if you decide to contribute to a Dependent Care Reimbursement Account.

• Employees may contribute up to $5,000 per year to the Dependent Care Reimbursement Account. Your contributions will be deducted pre-tax from your pay.
• Only expenses incurred during the current plan year (Jan. 1 - Dec. 31) will be eligible for reimbursement. You must be participating in the plan when the expense is incurred.
• Your total contribution cannot be greater than your earned income or your spouse's earned income, whichever is lower. This means if your spouse's salary is $4,000 and your salary is $30,000, the most you can contribute is $4,000. In addition, your deposit to the Duke reimbursement accounts may not exceed half of your gross pay each pay period.
• If your spouse has no earned income, you are not eligible for a Dependent Care Reimbursement Account. However, there are special rules if your spouse is a full-time student or is disabled. Contact HealthEquity at 1-877-924-3967 for more information.
• If both you and your spouse have Dependent Care Reimbursement Accounts, your total combined contribution limit is $5,000. Likewise, if you and your spouse file separate federal income tax returns, your individual Dependent Care Reimbursement Account limit is $2,500. If you are single with an eligible dependent, however, you can contribute up to the full $5,000.
• You must report the name, Social Security number or taxpayer identification number of each dependent care provider, the provider signature or receipt, and service dates when you submit a Dependent Care Reimbursement Account claim.
• If you participate in the Dependent Care Reimbursement Account, you must complete IRS Form 2441, "Child and Dependent Care Expenses," along with your IRS Form 1040, "U.S. Income Tax Return."
• If you are divorced, legally separated, or have lived apart from your spouse during the last six months, the parent who is able to claim your child as a dependent on his or her tax return is the custodial parent (the parent who has custody of the child for the greater portion of the calendar year). This parent can be reimbursed for the child's day care expenses through the Dependent Care Reimbursement Account.
• If you use a Duke-contracted facility, such as the Duke Children's Campus or The Little School at Duke, and receive a subsidy, the amount that you can contribute to the Dependent Care Reimbursement Account is reduced dollar-for-dollar. Call Duke's Open Enrollment Service Center at 1-919-684-5600 for more information.
• If your salary is above $150,000 in 2023 ($135,000 in 2022), federal law may require your dependent care election to be readjusted based on results of discrimination testing. If you are affected, you will be notified by HR-Benefits during the plan year of any necessary adjustment to your contribution amount.

Divorced or separated parents: Check with your legal or tax advisor to see if special rules apply to you that would enable your child to be claimed by the non-custodial parent or by both parents.

Tie-breaker: If two or more people want to claim the same child as their qualifying child, the person who has the right to is: (1) the child's parent - if one person is the child's parent and the other is not, (2) the parent with whom the child lives with longest in the year - if both people are the child's parents, (3) the parent with the higher adjusted gross income - if both people are the child's parents and the child lives equally with both during the year, or (4) the person with the higher adjusted gross income - if both people are not the child's parents.

Dependent Care Reimbursement Account vs. Income Tax Credit

Federal and North Carolina law provide a dependent care tax credit. Based on recent changes in federal tax law, many employees will save more money by participating in the Dependent Care Reimbursement Account than by filing for the tax credit.

The amount of your day care expense that is eligible for the "tax credit" is reduced dollar-for-dollar by the amount that is reimbursed under the Dependent Care Reimbursement Account. This means you can't take the "tax credit" on any expense that has been paid through the Dependent Care Reimbursement account. Accordingly, you need to determine whether the reimbursement account or "tax credits" is more beneficial to you. Before making a decision, you may want to consult your tax advisor.

There is information available that can assist you. IRS Publication number 503 may be downloaded via the IRS web site at www.irs.gov. In addition, IRS Form 2241, "Child and Dependent Care Expenses", which needs to be completed along with your IRS Form 1040, provides information on calculating the amount of your federal credit. Information to calculate the amount of your North Carolina child care credit is available to you through the State Department of Revenue instruction D-400 with TC, which may be downloaded at www.dor.state.nc.us.

Additional Questions

If you have questions about your Dependent Care Reimbursement Account that are not addressed on this website, please contact:

HealthEquity
Phone: 877-924-3967
Fax: 877-353-9236
Mailing Address: Claims Administrator, PO Box 14053, Lexington, KY 40512