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"Plans: Flexible Spending Account"
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IntroductionWhat is the Dependent Care Account?The Dependent Care Account assists in funding eligible child care expenses and certain costs associated with the care of a dependent child, spouse or parent. Participants make pre-tax Contributions by payroll deduction and the Contributions are allocated to an account maintained on the participant's behalf by the University. After paying an eligible out-of-pocket expense, a tax-free reimbursement check may be received from the Account. The result of paying for dependent care expenses through the FSA Plan may be lower income taxes and, often, an increase in take-home pay.
What is the University's Dependent Match Program?The University provides non-taxable matching funds directly to an employee to assist in meeting a portion of his or her annual dependent care expenses. Such funds are made in the form of a University match to the employee's FSA contribution.
Who is eligible to receive University matching funds?This program is offered to eligible full-time employees participating in the FSA Dependent Care Account. Employees must meet the following eligibility criteria to receive the University's matching contribution:1. Full-Time Status. Appointment of 100% full-time, or scheduled hours of at least 35 hours per week, and. 2. Total Family Income. To qualify for University matching contributions, total family income must be below $80,000. Total family income is determined by: A) An individual's Adjusted Gross Income as reported on his or her latest federal income tax return (IRS Form 1040), and B) His or her spouse's federal income tax return if they file taxes separately.
How much will the University match?
The maximum annual amount which can be pledged to the FSA dependent care account inclusive of employee and matching University funds is $5,000. Depending on total family income, there are University matching funds available for childcare expenses. Those with family earnings up to $50,000 can pledge a total of $5,000 to the dependent care Flexible Spending Account during the year and receive $3,000 from the University. Those with family earnings between $50,001 and $60,000 can pledge a total of $5,000 and receive $2,000 from the University. Those with family earnings between $60,001 and $80,000 can pledge a total of $5,000 and receive the maximum matching amount of $1,500 available from the University. Employees who qualify for matching contributions and choose a total annual pledge amount less than $5,000 will receive University funds according to the matching schedule. Interested individuals should contact the Benefits division for assistance in calculating annual pledge and matching amounts. The $5,000 combination of University matching funds and the employee's personal funds complies with IRS rules to exclude these contributions from taxation.
What is the University's Backup Child Care Match Program?The University provides non-taxable funds of up to $25 per event for a maximum of up to $150 per calendar year directly to faculty and staff to assist an individual in meeting a portion of his or her backup child care expenses at designated providers.
One of the dilemmas faced by a working parent is arranging for the care of a child when the primary child care provider is suddenly or unexpectantly unavailable. Such arrangements must often be made with little advance notice. In addition to difficulties in arranging for care, an employee may also incur unanticipated out-of-pocket expenses when care above and beyond day care or schooling is required.
Who is eligible to receive University matching funds for the Backup Child Care Match Program?Benefits-eligible full-time faculty and staff may participate in the backup child care plan. Benefits eligibility requires that an individual be scheduled to work at least 35 hours per week (full-time). Faculty and staff must be full-time (100%) to participate in the plan.
How much will the University match for the Backup Child Care Program?The Backup Child Care Program provides non-taxable University funds of up to $25 per event up to a maximum of up to $150 per calendar year toward the total cost of a caregiver. The University contribution is made when a claim is received, but does not require an employee contribution specifically for child care. The benefit amount is provided as additional earnings and appears on employee paycheck stubs as “DEC.” The total annual amount received from the dependent care account cannot exceed $5,000, including the amount received from the University for backup child care. To qualify as an approved claim, backup child care must be provided by a recognized provider, including Kindercare facilities and the Evanston McGaw YMCA Children's Center.
Payment of backup child care benefits will be made by submitting a completed FSA Dependent Care reimbursement claim form with a copy of the invoice from the caregiver to the Benefits Division.
What providers are available for the Backup Child Care Program?Kindercare facilities
Can I view My FSA Account Information On-Line?Yes, your 2007 FSA Account information including annual pledge amount, year to date contributions and claims may be viewed on-line using HRIS Self Service. 2008 information may be viewed from the PayFlex web site.
How does the Dependent Care Account work?After you enroll, the Dependent Care Account works like this: The amount you have specified is taken from your paycheck each month and deposited in your Dependent Care Account. You pay your dependent care expenses as usual. You submit a claim form and receipts to the Benefits Division requesting reimbursement for these expenses. Benefits sends you a reimbursement check.
EligibilityWhich dependents are eligible?Qualifying dependents are:
If care for a disabled spouse or dependent is provided outside the home, the dependent must live with you at least eight hours a day.
What if I separate from the University?If you separate from the University, you may submit claims only for eligible expenses incurred through the date of termination (last day worked). Expenses incurred after this date are not eligible for reimbursement. An individual may continue to submit claims for reimbursement for eligible expenses through February.
ContributionsHow much can I contribute to my Dependent Care Account?The IRS limits the amount you can contribute to the program. You may contribute an amount up to the lesser of:
These limits apply whether you are single or married. If your spouse is also eligible to participate in an employer's dependent care assistance plan, your combined Contributions should not exceed the above maximums. (This also applies if both you and your spouse are Northwestern employees.) The IRS does not consider you married for purposes of the Dependent Care program if you:
If your spouse is incapable of self-care or is a full-time student, his or her earned income is considered to be $200 per month if you claim one dependent, or $400 per month if you claim two or more. To be considered a full-time student, your spouse must attend school for at least five months of the year and may not be exclusively a night student. The maximum monthly contribution is $416.66 for a single individual or for a married individual who files taxes jointly; or $208.33 for a married individual who files taxes separately. For individuals who become eligible midyear, the maximum contribution is the monthly amount times the number of remaining months in the year.
Can I change the contribution amount at a later date?Yes, IRS regulations state that an individual may change (increase or decrease) or stop his or her FSA contributions only within 31 days from the date of a qualified change in family status such as marriage, birth of a child, divorce.
Enrollment and Effective DatesWhen may I enroll in the Dependent Care Account?To participate in the FSA Dependent Care Account, employees must enroll in the Dependent Care Account within 31 days from the date of employment, assuming a benefits eligible position, or during Open Enrollment, employees must complete an enrollment form and the completed enrollment form must be received by the Benefits Division by the stated deadline date in order to participate in the plan.
What Is an eligible change in status?IRS regulations state that an individual may change or stop his or her FSA Contributions only within 31 days from the date of a qualified change in family status such as:
Change in employment status such as:
Changes that do not qualify include:
Must I enroll every year to continue participation in the Dependent Care Account?Yes, a completed enrollment form must be received by the Benefits Division or the Chicago Human Resources Office by the end of Open Enrollment in order to continue participation in the Dependent Care Account.
ClaimsHow do I file claims?After an individual has paid for an eligible expense, he or she
may submit a claim for reimbursement from his or her FSA account.
For services received in calendar year 2007, an individual must
complete a reimbursement
claim form Required documentation for reimbursement from the Dependent Care Account included either the social security number or federal tax identification number of the child care provider. Dependent Care claims may be submitted monthly directly to the Benefits Division. A request for reimbursement must be for at least $20. Individuals submitting completed claim forms by the 15th of a month will be paid on the last working day of a month from the payroll system. Individuals participating in the Dependent Care Account may be reimbursed only up to the amount in his or her Account. The deadline for submitting reimbursement claims for the FSA Health and Dependent Care Account for services received in a calendar year is the end of February of the next calendar year. Any monies remaining in a participant's account as of March 1 of the next calendar year are forfeited in accordance with IRS Regulations.
What is the deadline for submitting claims?Claims for services received during calendar year 2007 may submitted to the Benefits Division by the cut off date for the monthly payroll and will be processed and paid that month. Othewise, payment will be made the following month. Claims for services received during calendar year 2008 may be submitted at any time. In order to not have account balances forfeited, the deadline for submitting claims for services received in a calendar year is the end of February of the next year.
How is reimbursement payment made?For services received during calendar year 2007, FSA reimbursement checks and direct deposit notices will be generated by the Human Resources Information System (HRIS) - payroll system. Payment will be made in the same fashion an individual's regular paycheck is made. For example, if an individual receives his or her paycheck by direct deposit, the FSA reimbursement will also be made by direct deposit and a check stub will be sent to the employee's department using the recorded check address. For services received during calendar year 2008, PayFlex will process FSA claims. Payment may be received by check or direct deposit. A debit card is not available for the payment of dependent care claims.
Which expenses are eligible?Dependent care expenses must meet the statutory requirements of
IRC sections 21 and 129. For more information, refer to IRS
Publication 503 A reimbursement can only be issued after you have actually received the qualified services. You will receive payment for services received to date as of the date the claim is submitted, up to the amount available in your account. The balance of your claim will be held until the services have been received. The dependent care must be necessary so that you, or you and your spouse, can work or look for work (you must have work income during the year). If care is provided in a day-care center, the center must charge a fee. If the center cares for six or more dependents who are not residents, it must comply with all state and local licensing laws and applicable regulations. Expenses must be incurred during the Dependent Care plan year: January 1 through December 31 or during the period of active University employment and making contributions to the plan. You incur expenses when the care is provided, rather than when you are billed or when you pay for the care. You will not be reimbursed for expenses until after the care is provided. Reimbursement is not made in advance of services being received. If you enroll midyear, expenses incurred before your employment effective date are not eligible. If you enroll in December, your Dependent Care Contributions will not be credited to your account until January, and you will not be able to claim December dependent care expenses. (Also see "What If I Go on Leave or Separate from the University.") NOTE: Expenses claimed under the Dependent Care Account may not be applied toward the dependent care tax credit on your income tax return. Eligible Expenses: A Partial ListExpenses which meet the requirements of the program include any of the following:
Ineligible Expenses: A Partial ListExpenses which do not meet the requirements of the program include any of the following:
Please note: School expenses for children below the first grade may or may not be eligible, depending on your day-care arrangement. Refer to IRS Publication 504 or consult your tax adviser.
What happens to dependent care funds I don't use?All eligible funds must be for services provided during the period contributions are made in a calendar year and must be claimed by the end of February of the next calendar year. Under Internal Revenue Service (IRS) regulations, any monies not claimed from the Dependent Care Account as of March 1st are forfeited. Any forfeited funds are used by the University to pay the cost of administering the Dependent Care Account. Therefore, careful planning of projected dependent care expenses is essential.
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| Plans | Type of Employee | Life Change Event | Benefits FAQ | Benefits Forms | Provider Contact Information Human Resources Home | Jobs | Training & Development | Benefits | Payroll | HRIS | Forms | Policies & Procedures Staff Handbook  | Holiday Schedule | Human Resources StaffNorthwestern Home | Northwestern Calendar: Plan-It Purple | Northwestern Sites A-Z | Northwestern Search Human Resources 720 University Pl. Evanston, IL 60208 Phone: 847-491-7513 Fax: 847-467-2288 E-mail:benefits@northwestern.edu Last updated 12/28/2007 World Wide Web Disclaimer and University Policy Statements © 2007 Northwestern University |
FSA Plans
Summary Plan Description
Introduction
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