The Dependent Care Flexible Spending Account allows you to save pre-tax dollars to pay for qualified dependent care expenses for children up to age 13 or for elderly family members.
- Enroll during Open Enrollment in May or anytime if you have a qualifying event, (ie. a birth or change in cost or coverage of care)
- Estimate your expenses carefully and set the deductions only to the amount you will use for the remaining year — you’ll lose any unused balance at the end of the plan year, per IRS rules
- You can contribute up to $5,000 to pay for dependent care expenses you incur throughout the calendar year
- Keep in mind, you and your spouse combined contributions cannot exceed $5,000 in Dependent Care Flex Accounts
- Be sure to sign up for the direct deposit option to conveniently receive your pretax dollars in your account the same day as your paycheck
The savings can really add up! For example, a married couple filing taxes jointly, with a combined income of $80,000 will save federal taxes of $1250 (or 25% of $5,000). In addition, social security taxes would be reduced $310 and Medicare taxes by $72.50. That is over $1,600 in savings.Call PEHP with questions 801-366-7503, or go to pehp.org.