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| FLEXIBLE SPENDING ACCOUNTS |
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Dependent Care FSA
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The IRS determines what expenses are eligible for reimbursement from
an FSA. In general, eligible dependent care expenses must be incurred
in caring for:
- Children12 and under you claim as dependents on your federal income
tax return
- Your spouse or any other dependent of any age who is physically
or mentally unable to care for him or herself, and whom you may claim
as a dependent on your federal income tax return.
If you are married, you and your spouse must both be employed, and
your work schedules must conflict so that dependent care services are
necessary so both of you can work. Generally, if your spouse is not
employed, your dependent care expenses will be eligible for reimbursement
only if your spouse is a full-time student or physically or mentally
unable to care for himself or herself.
Dependent Care Match
When you join a dependent care FSA, Valassis will match up
to $600 of your contributions to the account, to help you pay child
or adult day care expenses. The maximum match is $600 if you contribute
the same amount or more. In order to receive the full match, you must
remain in the plan for the full year as the match will be contributed
over the total number of pay periods during the year. Only those associates
hired by 10/1 will be eligible for dependent care spending account match
for the upcoming plan year.
Examples of how this would be applied:
1. If you contribute $400, the maximum
to be matched would be $400 bringing the total for your account to $800,
assuming you remain in the plan for the full year.
2. If you contribute $1,000, the maximum match would be $600 bringing
the total for your account to $1,600, assuming
you remain in the plan for the full year.
3. If you are a salaried associate paid bi-weekly, you contribute $1000,
and you leave the plan after 7 months (15 bi-weekly pay periods), the
maximum match would be $346.15 ($600/26 pay periods x 15 pay periods
in the plan).
4. If you are a salaried associate paid
bi-weekly, experience a qualified life status event and contribute $1,000
beginning August 1, 2010 (11 remaining bi-weekly pay periods), the maximum
match would be $253.85 ($600/26 pay periods x 11 pay periods remaining).
Eligible Expenses
Eligible dependent care expenses include the following:
- Dependent day care provided at a facility that complies with local
laws (including day care centers, nursery schools and preschools)
- Wages paid to a baby-sitter or companion in or outside your home
during working hours (provided the person providing care is not someone
you claim as a dependent on your income tax)
- In-home care for a dependent (child or adult) incapable of self-care
(including feeding, bathing, dressing and administration of medicine,
etc.)
- Day camp fees (even if the camp specializes in a particular activity,
such as computers or soccer) if the camp is providing work-related
care
- You can count the cost of care provided outside your home if the
care is for your dependent under age 13, or any other qualifying person
who regularly spends at least 8 hours each day in your home
- Household services (when provided as part of dependent care), such
as cooking, cleaning and general housekeeping
- Any care expenses must be so that you can work or look for work
or your spouse can work, look for work or attend school full-time
or is disabled and unable to work
Ineligible Expenses
Some examples of expenses that are not eligible for reimbursement include:
- Dependent care that is provided by a relative under age 19, a dependent
you can claim on your taxes or your spouse
- Dependent care that your provider does not report as taxable income
- Babysitting for social occasions
- Tuition expenses for schooling in kindergarten or higher grades
- Dependent health care expenses (these expenses, however, may be
reimbursable under the Health Care FSA)
- Overnight camp expenses
- Expenses in excess of your taxable income or that of your spouse,
whichever is less
- Food, clothing or entertainment expenses
- Dependent care expenses claimed as a deduction or credit for federal
or state tax purposes
The Internal Revenue Service publishes a booklet that provides guidance
on claiming dependent care expenses on your taxes. To receive a free
copy, contact the IRS directly at 800-829-3676 and request Publication
503, Child and Dependent Care Expenses. You may also review or download
this information from the IRS Web site at www.irs.gov.
You can also visit the WageWorks
website for more information.
Federal Dependent Care Tax Credit
A Dependent Care FSA is not the only way you can save on your taxes
when you pay dependent care costs. Expenses you incur that are eligible
for reimbursement from a Dependent Care FSA are the same expenses that
are eligible for a credit on your federal income tax return—but
you can’t use the same expenses for both types of tax savings.
In fact, the IRS requires that expenses eligible for the federal tax
credit be reduced, dollar for dollar, by any reimbursements you receive
from a Dependent Care FSA. Any eligible expenses not applied toward
one method may be applied toward the other.
Contribution Limits for Highly Compensated Associates
The IRS may limit contributions made to a Dependent Care FSA by certain
highly compensated associates. In the event that this limitation affects
you, you will be notified.
Reporting Your Dependent Care Account Contributions
If you use the Dependent Care FSA, the IRS requires that:
- Valassis report any before-tax contributions you redirected from
your salary to your Dependent Care FSA on your W-2 each year, and
- You file the name, address and taxpayer identification number or
Social Security number of your dependent care provider with your federal
income tax return.
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Summary
Plan Description
The legal summary of this benefit will be included in the
2008 Benefits Handbook.
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