Dependent Care Reimbursement Account

A Blue Priority Flex dependent care savings account allows employees to pay for eligible daycare expenses pre-tax.

How does a dependent care reimbursement account work?
Dependent care reimbursement accounts can be used to set aside dollars to care for a child, disabled spouse, elderly parent, or other dependent.

The maximum annual contribution is $5,000 (or $2,500 if married and filing separately). Qualified dependent care expenses are reimbursed up to the amount the employee has contributed to the plan throughout the plan year.

What expenses qualify?
Flex funds can be used to pay for eligible dependent care expenses for qualifying individuals:

• Children 13 years and under who reside in the employee's household.
• Adults/children mentally or physically incapable of self-care who spend at least 8 hours a day in the employee's household.

View a list of eligible expenses.

Additional guidelines for dependent care reimbursement accounts

• Dependent care expenses not related to work or school do not qualify for reimbursement.
• If the employee is married, his or her spouse must be a wage earner, a full-time student, or disabled and unable to provide for his or her own care.
• Employees may not claim dependent care expenses more than their annual salary or more than their spouse’s annual salary, whichever is less.
• If the employee’s spouse is disabled or a full-time student, the IRS assumes the spouse earns $250/month (one dependent) or $500/month (two or more dependents).
• Employees must be the custodial parent to use a dependent care reimbursement account, regardless of tax exemption status.
  

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