Dependent Care Flex Accounts

Janet

I participate in a dependent care account through my husband's employer. During the last open enrollment, we submitted the amount we wanted taken from each paycheck, based on our (then) current knowledge of our child care needs for the year(including after-school care and summer care). Now my mother has offered to care for the kids over the summer. This would greatly reduce the amount we'd need to "flex" for the year. In reading the regs, I'm unclear as to whether a change such as this would allow me to change our election amount. Does anyone have any knowledge about this? Thanks!

awilliams

I don't think that you can change your amount mid-year, but I will look into it and let you know what I find out. That is a very good question!

Jessica

I'm sorry to suggest bad news, but in our plan your change would not be allowed because it doesn't fall under the following categories: family status, employment status, dependent qualifications, residence or worksite. I don't know how other plans handle this so I would encourage you to keep asking.

Good Luck!

Down_the_Middle

Janet:
While I sympathize with your change of circumstances, you should not be permitted to change your deduction amount for only the reason you state. The law requires a "qualifying condition" to occur and unless you're also experienceing one of these conditions (eg. marriage, divorce, etc...) Dependent care deductions can be changed (increased or decreased) if you change providers, but that's probably not part of what you're having to deal with. Now, if your Mother becomes a bona-fide provider of child care services........

franfields

You need to find out the specifics of your plan. Ours is written so that the amount can be changed based on circumstance. For example, you may change facilities and, therefore, costs or a child may go to a non-custodial parent for the summer eliminating the child care costs for that period of time. Again, check your specific plan.

Michelle1070

I actually had this same question of my Flex-Plan and the answer I got was "yes" it can be changed because it is a qualifying event when changing daycare providers. You can reduce/increase or terminate. The dependent-care portion of the flex-plan has a few different guidelines than the medical portion. Interestingly enough, I also found out that I can claim my expenses one week in advance instead of waiting until they actually occur.

Lori B

There seems to be a lot of confusion with this issue. I do note that regs recently changed to expand the types of qualifying reasons to allow a mid-year change. Under the old regs, this reason would never qualify. Under the new regs, I believe change in child care providers is now an acceptable reason, assuming your plan document has been properly amended to bring it in line with these new changes. I'm not 100% certain here though as I have not researched this issue yet myself. good luck. Lori