Archive for Flexible Spending Account
November 19, 2008 at 5:53 am · Filed under Flexible Spending Account
I’m a working mother, it’s open enrollment time and I’m confused. I have a child who will turn 13 in 2009. I will still use vacation care and summer day camps to supervise him when his father and I are at work and he’s off from school. But I’ve heard there’s an age limit on contributing to a child-care flexible spending account. Am I still allowed to use that benefit for him? What are the current tax rules?
It’s not surprising that you’re confused, because even the experts Parental Guidance contacted - an accountant and an employee benefits vice president - initially disagreed on this one. You almost won the “stump Parental Guidance”
sweepstakes.
There is indeed an age limit on flexible spending account contributions to cover day care, after-school programs and day camps, and that age is 13, says Susan Sajiun-Fitzharris, vice president of employee benefits for HUB International, an employee benefits insurance agency in Smithtown.
You can put up to $5,000 of your salary before taxes into a flexible spending account to reimburse you for your qualifying child-care costs - but only enough money to cover expenses up until the actual date of his 13th birthday.
Note this wording from the IRS Publication 503, says Alan Dlugash, a partner in the tax department of Marks Paneth & Shron, with offices in Manhattan and Woodbury: “With respect to flexible spending accounts, you determine a person’s qualifying status each day. For example, if the person for whom you pay child- and dependent-care expenses no longer qualifies on Sept. 16, calculate their expenses through Sept. 15.”
In other words, if your child’s birthday is in October 2009, all of his 2009 summer day camp is eligible. However, if his birthday is in July, only the portion of camp up until his birthday will be prorated and covered, says Sajiun-Fitzharris. If his birthday is in April, your camp costs are not eligible at all. So you need to figure out your costs and plan accordingly.
As always, you forfeit any money that you put in that isn’t used for qualifying expenses, Dlugash says.
Need help with a parenting question? Ask us! E-mail: LIKids@newsday.com; put Parenting Q&A in the subject line. By snail mail: LI Kids-Parenting Q&A, Newsday, 235 Pinelawn Rd., Melville, NY 11747. Include your name, town, e-mail address and daytime telephone number.
http://www.newsday.com/services/newspaper/printedition/sunday/lilife/ny-lfbeth165925700nov16,0,1769279.column
November 17, 2008 at 7:08 am · Filed under Flexible Spending Account
I’m a working mother, it’s open enrollment time and I’m confused. I have a child who will turn 13 in 2009. I will still use vacation care and summer day camps to supervise him when his father and I are at work and he’s off from school. But I’ve heard there’s an age limit on contributing to a child-care flexible spending account. Am I still allowed to use that benefit for him? What are the current tax rules?
It’s not surprising that you’re confused, because even the experts Parental Guidance contacted - an accountant and an employee benefits vice president - initially disagreed on this one. You almost won the “stump Parental Guidance”
sweepstakes.
There is indeed an age limit on flexible spending account contributions to cover day care, after-school programs and day camps, and that age is 13, says Susan Sajiun-Fitzharris, vice president of employee benefits for HUB International, an employee benefits insurance agency in Smithtown.
You can put up to $5,000 of your salary before taxes into a flexible spending account to reimburse you for your qualifying child-care costs - but only enough money to cover expenses up until the actual date of his 13th birthday.
Note this wording from the IRS Publication 503, says Alan Dlugash, a partner in the tax department of Marks Paneth & Shron, with offices in Manhattan and Woodbury: “With respect to flexible spending accounts, you determine a person’s qualifying status each day. For example, if the person for whom you pay child- and dependent-care expenses no longer qualifies on Sept. 16, calculate their expenses through Sept. 15.”
In other words, if your child’s birthday is in October 2009, all of his 2009 summer day camp is eligible. However, if his birthday is in July, only the portion of camp up until his birthday will be prorated and covered, says Sajiun-Fitzharris. If his birthday is in April, your camp costs are not eligible at all. So you need to figure out your costs and plan accordingly.
As always, you forfeit any money that you put in that isn’t used for qualifying expenses, Dlugash says.
Need help with a parenting question? Ask us! E-mail: LIKids@newsday.com; put Parenting Q&A in the subject line. By snail mail: LI Kids-Parenting Q&A, Newsday, 235 Pinelawn Rd., Melville, NY 11747. Include your name, town, e-mail address and daytime telephone number.
http://www.newsday.com/services/newspaper/printedition/sunday/lilife/ny-lfbeth165925700nov16,0,1769279.column
November 10, 2008 at 8:01 am · Filed under Flexible Spending Account
Attention staff members: The 2009 Flexible Spending Account forms are available. Continue reading for more information.
The Flexible Spending Account allows employees to set aside a portion of income before it is taxed to pay for either unreimbursed health care expenses and/or dependent day-care expenses. In 2008, 258 MPS employees participated in this program. These employees sheltered approximately $543,610.00. For additional information, we encourage you to talk with colleagues who are currently FSA participants.
Flexible spending accounts provide benefits to both employees and employers. The employee benefits by not having to pay Social Security and Medicare tax on FSA deposits, as well as reducing income subject to federal and state taxes. The employer benefits by not having to pay Social Security and Medicare tax on the income that is deposited into an FSA. If you decide to take advantage of one or both accounts, careful planning is necessary. Please take a few minutes to read this information. This could result in significant tax savings. The deadline for the 2009 tax year enrollment is November 7, 2008. Payroll deductions will begin January 2, 2009.
When you enroll, you will receive a confirmation notice from the payroll office. If you do not receive confirmation by December 15, 2008, please contact Jo Majeske in the payroll office.
If you have participated in the past and wish to re-enroll in the FSA program for 2009 you will need to complete the FSA Enrollment Form. You will not be automatically enrolled for 2009.
If you have questions, please call Jo Majeske (923-5067) or Amee Hughes (923-5065) in the MPS payroll office.
http://www.mps.k12.mi.us/index.php?NewsID=176
November 8, 2008 at 1:50 am · Filed under Flexible Spending Account
New York State Comptroller Thomas P. DiNapoli is reminding New Yorkers of their eligibility to set aside pre-tax money for eligible health care and dependent care expenses by enrolling in employer-sponsored flexible spending accounts.
New York State employers may offer two programs that provide this pre-tax benefit: a Health Care Flexible Spending Account (which is different from a Health Savings Account) and a Dependent Care Flexible Spending Account.
In 2009, employees may deduct up to $5,000 per household in a dependent care account.
Although there is no official IRS limit to the amount of money that can be contributed to a Health Care account, many employers impose their own limits. For example, New York State employees have a $4,000 limit for unreimbursed health care expenses.
However, unlike other Federal benefits, an individual’s FSA election is only effective for one Benefit Period at a time. An individual must enroll each year that he or she elects to participate. Failure to enroll during the open enrollment period means that the individual cannot participate in the next Benefit Period year unless he or she subsequently experiences a “qualifying event.”
The open enrollment period for participation in 2009 ends on November 14, 2008 for New York State employees.
The Comptroller cautioned State employees that participation in these accounts doesn’t roll over, so even if an individual participated in his or her employer’s flexible spending program in 2008, re-enrollment is essential to continuing in the program during 2009. He also reminded New Yorkers eligible for the Earned Income Tax Credit that contributing to a flexible spending account has the effect of lowering their taxable income, and could therefore increase the amount of their credit under the EITC program.
Information about Flexible Spending Account is posted on the Internet at:
https://www.fsafeds.com/fsafeds/SummaryofBenefits.asp#WhatIsF
http://publicpersonnellaw.blogspot.com/2008/11/flexible-spending-accounts-for-health.html
