DEPENDENT CARE (DC)
If in order for you and your spouse to work, you need someone to care for your dependent, pre-taxing your DC under the plan may save you more than the tax credit you can claim at the end of the year. DC Credit VS CAFETERA PLAN
How Does It Work?
First you must determine the amount you will be spending on DC during your plan year. You may pre-tax up to $5,000 or $2,500 if you are married filing a separate return. If your spouse is a full-time student or disabled, he or she probably has little or no income. If your spouse has no income, than the maximum would be limited to $250 per month for one eligible dependent or $500 per month for two or more dependents. If the spouse has some income, but less than $5000, than the maximum would be limited to what the spouse earned. Please contact SABC or your tax advisor for further information.
Your annual election will be divided by the number of deductions within the plan year. That amount will be deducted tax free and placed into an account.
To be reimbursed, you must submit a claim to SABC along with a receipt from your provider. Funds must be available before reimbursement can be made. (See Claims Procedures)