The Dependent Care Account can be offered in conjunction with a health care Flexible Spending Account or as a standalone benefit. The Dependent Care Account allow employees to set aside money on a pre-tax basis to pay for eligible childcare or other qualified dependent care expenses. If in order for the Employee and the spouse to work they must use a Daycare provider, they are eligible to participate. The Dependent Care Account is funded via pre-tax dollars withheld from the employee’s paycheck.
Unlike the Health FSA, where the limit is set by the employer, the limit for the Dependent Care Account is a statutory limit on the amount that can be pre-taxed through a Dependent Care Account. The limits are:
- $5,000 if married filing a joint return or single
- $2,500 if married filing separately as head of household
An employee should decide whether they should participate in the Dependent Care Account or take the dependent care tax credit on their personal taxes. They should consult with their CPA or tax advisor on this topic.
BMS LLC Dependent Care Account Administration includes preparation of required Plan Documents including Summary Plan Description and Adoption Agreement, Employer Only secured website for easy submission of eligibility changes and access to full reporting, comprehensive employee education, routine plan updates to our Clients based on changes in rules and regulation of Section 125, completion of required Discrimination Testing.
BMS Administration features for employees includes FREE Debit Card, free Mobile App for smart phones and an employee website for secure claims entry, tracking of reimbursements. BMS administration also includes daily claims review, adjudication, and processing, as well as twice a week reimbursement payments. Our dedicated Customer Services Staff is always available to answer any questions.