Dependent Care Reimbursement Care
A Dependent Care Reimbursement Plan is a pre-tax benefit account used to pay for dependent care services like preschool, summer day camp, before or after-school programs, and child or elder daycare services.
Who Qualifies for a Dependent Care
- A dependent child under the age of 13 who lives with you for more than half of the year.
- An adult tax dependent, such as a parent, who is not able to care for themselves and who lives in your home a minimum of eight hours a day.
How it works
- Step 1: Estimate how much you spend on eligible dependent care expenses each year. Then decide how much you need in your account.
- Step 2: Sign up for your Dependent Care Reimbursement Plan during your open enrollment period. The amount you elect will be split among 12 months. The money is taken out of your paycheck before taxes and is deposited into your account.
- Step 3: When funds are in your account, you can pay for eligible dependent care services. Log in to your account at wageworks.com to find a full list of eligible dependent care expenses.
IMPORTANT: You can only use this program if you do not use the Child Care Tax Credit. Please note you may not participate in both programs.
Disclamer: The term “savings” herein refers only to tax savings and actual savings are dependent on individual tax rates. No part of this document constitutes tax, financial, or legal advice. Please consult your advisor regarding your personal situation and whether this is the right program for you.
Dependent Care Reimbursement Plan (DCRP)
Add Up Your Savings
In the example below, let’s say you earn $45,000 per year and decide to put $5,000 into the DCRP to pay for dependent care you expect to incur in the next 12 months. You can save $750 by lowering your taxable income, and paying less tax.
Without the DCRP, you pay taxes on every dollar you earn, and then you pay for dependent care expenses. With DCRP, you can set aside a portion of each paycheck before taxes are calculated, so the taxes you owe should decrease.
Easy to Use Tools File a Claim or Submit a Receipt for Dependent Care Reimbursement Plan
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