Dependent Care Flexible Spending Account

The Dependent Care Flexible Spending Account is a pre-tax benefit account used to pay for eligible dependent care services. Employees may elect between $240 and $5,000 annually, however, some other limitations* may apply.

Eligible Expenses

Examples of eligible dependent care expenses:

  • Before-school and after-school day care expenses
  • Preschool tuition
  • Elder care
  • Day camp

Eligibility

Regular faculty, staff, and union members working = >50% time are eligible to participate in the Dependent Care Flexible Spending Account under the Brown University Flex Plan.

Coverage

Child dependents under the Dependent Care Flexible Spending Account must be under age 13. Older dependents, including a spouse, child, or parent, must be physically and/or mentally unable to provide self care (as certified in writing by a licensed physician).

Dependent care may be provided:

  • At home, if the care is not provided by someone claimed as a dependent;
  • Outside of home, provided there is no overnight stay by the dependent child; or
  • Outside of home, for a dependent age 13 or older (physically and mentally incapable of self-care as certified in writing by a licensed physician) and spends at least eight hours/day at home

Covered expenses must be incurred during the plan year on or after the employee date of eligibility. Under IRS regulations, expenses are incurred when the service is provided, not when the bill is paid. Certain expenses specifically are not covered. Examples are: overnight camp, housekeeping services, and after-school instructional or enrichment classes/courses.

In order to claim Dependent Care expenses for children or a disabled dependent, the dependent must be claimed as a dependent on the employee federal income tax return* (or be prevented from doing so only because she or he earned more income than the exemption amount or, in the case of a spouse, is filing a joint return).

* Certain exceptions may apply for children of divorced or separated parents; employees may wish to review IRS Publication 503 or consult with a tax advisor for additional information.

Allowable Contribution**

Employees may elect to set aside a minimum of $240 per plan year. The maximum allowable contribution may be the smallest of the following:

  • $5,000 if married and filing an income tax jointly with a spouse or if single; or $2,500 if married and filing an income tax separately from a spouse; or
  • The employee's taxable compensation minus all pre-tax salary reductions, including Dependent Care Flexible Spending; or
  • The actual or projected income of a spouse (a student spouse or mentally/physically incapable of self-care is projected to earn $200 per month for one dependent or $400 per month for two or more dependents).

** In accordance with Federal Tax Guidelines, the plan is subject to a non-discrimination test that may reduce the maximum amount of compensation that a highly compensated employee may set aside. When applicable, the Benefits Office will notify the employee as soon as possible after the plan year begins.

Brown will divide the employee's total annual contribution amount and deduct it equally among the number of regularly scheduled paychecks remaining in the calendar year.

Please Note: To ensure compliance with current IRS standards and practices, Brown may withhold and report taxes on certain dependent care benefits received, which are subsidized by Brown University. If the total of your back-up care subsidies received in a calendar year (or total of your subsidies plus your annual Dependent Care Flexible Spending Account election) exceeds the annual $5,000 tax-free limit allowed by the IRS, amounts over $5,000 will be considered imputed (taxable) income. Learn more here.

Election Changes

  • Employees may increase or decrease elections under the Dependent Care Flexible Spending Account during the course of the plan year only in the event of a change in family status. In this case, a change in family status is defined as marriage, divorce, birth or adoption of a child, death of a spouse, commencement or termination of employee or spouse's employment, or a change from full-time to part-time or from part-time to full-time employment by the employee or spouse. 
  • Requests for a change in total annual contribution amount due to a change in family status, along with supporting documentation, must be submitted in writing to the Benefits Office within 31 days of the occurrence of the change.

Please see important changes related to the Flexible Spending Account at the top of the page. 

Reimbursement

All requests for reimbursement must be submitted to Sentinel Benefits, the plan administrator, within 30 days of the grace period extension date.  The deadline means if mailed, claims must be postmarked by that date. If faxed or emailed, claims must be received prior to midnight.

Sentinel Benefits
Fax: 781-213-7301

To obtain more information, call Sentinel Benefits at 888-762-6088.

This summary is for informational purposes only and does not constitute a legal contract. In cases where disputes occur, the Plan Document will be the ruling and binding instrument.