The Dependent Care Spending Account allows for tax-free reimbursement of eligible, work-related expenses for the care of a qualified individual. Expenses claimed must be for care required so that an eligible employee (and spouse if applicable) can work, look for work, or attend school on a full-time basis. Qualified individuals include:
- Your dependent child(ren) under the age of 13 who are claimed as an exemption on your federal income tax return or under the age of 13 who are in your custodial care for 50% of the time or greater.
- Your spouse or other tax dependent who is physically or mental incapable of self-care and lives with you for more than half the year.
The key to making the most of your Dependent Care Spending Account is understanding the expenses that qualify for reimbursement. When submitting a claim for reimbursement, you are responsible for ensuring the expenses are acceptable per the IRS guidelines, and appropriate supporting documentation is provided.
The following is a summary of common qualified expenses for reimbursement under your University of Iowa Dependent Care Spending Account. The list is intended to be a general guide of eligible expenses and is not all-inclusive. All expenses are subject to change in accordance with plan and IRS regulations. Further, this list does not guarantee reimbursement.
- Au Pair
- Before & After School Care
- Day Camps – Summer, Holidays, No School Days
- Day Care Center
- Employment Taxes for dependent care provider
- In-Home Day Care
- Preschool Tuition
The following expenses must meet specific criteria to be considered eligible. The list is intended to be a general guide and is not all-inclusive.
- Agency Fees, if required to pay fee to obtain care
- Care or Elder Care for a dependent who is physically or mentally incapable of self-care, LMN required
- individual must meet the requirements of a tax dependent
- individual must reside in the participant’s home for at least 8 hours each day
- Care provided by a foreign national, provider must be eligible to work in US and have a SSN
- Care provided by a relative,relative must meet following criteria:
- cannot be a dependent who participant can claim as an exemption
- cannot be a child of the participant under the age of 19 at the end of the year, even if not a dependent
- cannot be a person who was participant’s spouse at any time during plan year
- cannot be the parent of the qualifying person
- Deposits, care must be provided for the expense
- deposits paid to “hold a spot” and then forfeited, are not eligible
- if care is provided on a future date, the expense is eligible for reimbursement when care is provided
- Early Drop-Off / Late Pick-Up, when due to work schedule
- Overnight Care, eligible when parent(s) are working overnight
The following expenses are not eligible to be reimbursed under your University of Iowa Dependent Care Spending Account. The list is intended to be a general guide and is not all-inclusive.
- Boarding School
- Care for a child over the age of 13
- Care of child when expense is incurred by non-custodial parent
- Care provided by participant spouse or parent of the child
- Deposit, when care is not provided for the expense
- Fees – transportation, field trips, materials, supplies, diapers, activity, clothing, food
- Late Payment Fees, Finance Charges
- Lessons – music, dance, swimming, sports
- Nursing Home Care
- Overnight Camp, even if daytime portion is billed separately
- Registration Fees, when care is not provided for the expense
- Summer School
- Tuition for grades – K and above