Dependent Care Spending Account

Dependent Care
Spending Accounts
Use it or lose it!
What is a Dependent
Care Spending Account?
Per the IRS, guidelines are:
Pre-tax savings account to pay for child-care or
elder-care expenses for someone on your tax
return (pre-federal, state, SS & Medicare taxes)
Care must be needed so that you can work
You must provide your provider’s Social Security
number so be sure they are claiming the income
Use it or Lose it!
How much may I contribute?
CMH allows:
Between $100 and $5000 (even if one child)
Withholding is based on # of paychecks
remaining in the year (24 max)
May be started, stopped or changed at hire,
during Open Enrollment or after a Qualifying
Event. (Note: a change in dependent care
tuition is a qualifying event.)
CMH subsidizes your DC
Spending Account!
CMH will help fund your DCSA. Your previous
year’s income tax return determines the subsidy:
Gross income reported on
on your last tax return
Over $60,000
$30,000 to $60,000
Under $30,000
CMH Subsidy
How does the subsidy work?
For example, say you are signing up for a
$5,000 (max) DCSA. The chart below shows
how the subsidy works
You contribute Subsidy % CMH contributes
x 15%
$ 652
x 20%
$ 833
x 25%
How does the Subsidy reach
my DC Spending Account?
Say you signed up for a $3000 DCSA and are to
receive a $500 subsidy. These steps occur:
HR instructs Payroll to give you a $500 taxable bonus
HR sets your DCSA deduction at $500 that week
The entire bonus will be deducted before
 Federal and state tax withholding
 Social Security & Medicare tax withholding
Finance submits your $500 to UMR
You may submit for $500 reimbursement from UMR
Your W-2 income will not reflect the bonus but will show $3000
was withheld for your DC Spending Account

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