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Please Note:

  • You must be paying US income tax to be eligible for this benefit. 
  • You will need to decide which is more beneficial to you and your family - The Childcare Benefit (The Childcare FSA) or the Dependent Care Tax Credit. 


Child-Care Benefit

Overview

The Child-Care Benefit is available to Reliant field workers and employees who need or wish to provide child care for a dependent. Any Reliant employee may elect this benefit (it doesn't matter how many hours you are employed per week by Reliant), as long as the child care costs the employee is incurring and seeking to reimburse from the plan are related to the employee and his/her spouse working (or seeking employment). This benefit is part of Reliant's Cafeteria Plan, which allows pre-tax wages to be used for certain benefits. Some of the IRS requirements to utilize the Child-Care benefit include: 

  • The person receiving care is a dependent in your home.
  • If both parents live in the home, both parents are working or actively seeking work.
  • Child care is provided in manners compliant to IRS requirements.
    • See exclusions listed below in FAQ's: "What type of child care is not eligible for reimbursement?"
  • Maximum reimbursement allowed is: 
    • $5,000 annually per household, if you are married and filing jointly or single, filing head of household. 
    • $2,500 annually per employee, if you are married and filing separately.

    • Maximum reimbursement cannot exceed either parents individual income. 

How Do I Utilize This Benefit? 

In order to take part in the benefit, you must enroll in the benefit annually during Open Enrollment or at the time of a qualifying event. If you miss Open Enrollment, you may submit a Cafeteria Form by December 20 to affect the following year. These qualifying events include birth, adoption or foster placement, the return to work of either parents or a significant change in income.

When the Child-Care Benefit is chosen, you select an amount to be deducted from your pre-tax earnings each paycheck for the entire year.

  1. The funds will be held in a special account for you at Reliant. 
  2. You may then submit your child-care receipts on the child-care reimbursement form found on Solomon. 
  3. The reimbursement you submit will be eligible for payment up to the balance that has been reserved from your paycheck at the time of the reimbursement request, or will be held until sufficient funds have been withheld from your pay. We are unable to partially pay (split payment into multiple months). 
  4. Child-Care Benefit funds can not be rolled forward to next year. Excess funds are distributed among all participants, so plan your deduction accordingly.
  5. IRS form 2441 must be filed with your tax return for any tax year that you utilize this benefit. 

If you desire to elect the Child-Care Benefit, you will need to enroll using the form linked to below to sign up for your Child-Care Benefit employee contribution. 

How Does This Benefit Help Me? 

The Child-Care Benefit employee monthly contributions are deducted from your paycheck before tax. These dedicated child-care reimbursement funds are not part of funds applied to normal reimbursements but are set aside specifically for child care.

How Long Does My Election of This Benefit Last? 

You may not make any changes to your contribution until the next open-enrollment period. This contribution remains in effect even if your employment becomes benefits ineligible. However, a change in employment or income affecting you or your spouse is a qualifying event. If there is a change, you must reach out to payroll@reliant.org to seek a change to your contribution. 

Excess contributions not used for this year's child-care reimbursements will be distributed to all participants in the child-care plan based on % of contribution. Your unused contributions will not be returned individually to you, so set your contribution modestly.

FAQ

When are child-care reimbursements paid?
Child-care reimbursements are generally paid out on the 25th of each month (or the closest business day prior, when the 25th falls on a weekend or holiday.) Expenses must be submitted before the 20th of each month in order to be eligible for payment on the 25th. Reliant waits until payroll is processed and posted to determine if there are sufficient funds in the employee's child-care account to pay a reimbursement.
If I have back pay or other back reimbursements, does that affect a child-care reimbursement being paid out?
 No, child-care reimbursements are not part of the order of pay. The monthly child-care election is deducted from your payroll pre-tax. Therefore, a child-care reimbursement can still be paid even if you are in a back pay situation. There just needs to be sufficient funds in the child-care account to pay the reimbursement.
What child-care costs are eligible for reimbursement?
Child-care reimbursement is available for child-care services while you and your spouse ,if you are married, are either working or looking for employment. This can be for child-care services during the day or child-care services needed at night, as we know sometimes field workers have non-traditional work hours.
Is there an age limit of the child for the child-care costs to be eligible for reimbursement?

When your child is below the first grade, the cost associated with child care, separated out from the cost of schooling, is reimbursable. If the cost of schooling is incident to and cannot be separated from the cost of child care, then the total cost is eligible for reimbursement. Kindergarten is not reimbursable. When your child is in first grade or higher, but under age 13, the cost of child care must be separated from the cost of schooling to be eligible for reimbursement. This would apply to before- and after-school child-care programs/arrangements.

Are child-care reimbursements paid as funds are available or do I have to have the full amount available for a reimbursement to be paid?
Child-care reimbursements must be paid in full amounts, just like reimbursements. If your July child-care reimbursement is for $600 and there is only $500 in your child-care account, Reliant would wait to pay the reimbursement until the account has sufficient funds to pay the full reimbursement. However, we do allow a field worker to submit a large reimbursement but then request it be paid out at a lower amount (see below). 
Is there a way to request a submitted child-care reimbursement be paid out at a lower amount?
 Yes. This action would forfeit the remaining amount from being paid out. You must initiate the request to reduce a child-care reimbursement amount. This can be done by sending an email to reimbursements@reliant.org such as, "Please pay my January child-care reimbursement of $1,000 using the $500 that is available in my child-care account."
Can I pay a relative for child-care costs?
Yes. You can pay a relative as long as that relative is not a dependent child under the age of 19 that resides within your home.
What types of child-care expenses are NOT eligible for reimbursement?

The following expenses are not eligible for reimbursement under an IRC Sec. 125 or 129 plan.

  1. Expenses for kindergarten, if the expenses are primarily educational in nature, regardless of half- or full-day, private or public school, state mandated or voluntary.
  2. The cost of schooling for your child(ren) enrolled in kindergarten or higher.
  3. The cost incurred to send your child(ren) to overnight camp.
  4. The cost of transporting a qualifying person to and from a care location or from a care location to school.
  5. Dependent care costs you pay while you are off from work because of illness or injury.
  6. The amounts you pay to a dependent that you or your spouse, if you are married, can claim as an exemption.
  7. Daycare for a child aged 13 or older.
  8. Nursing homes.
Is there a deadline for submitting child-care reimbursements to Reliant for a given year?
Yes. We must receive all child-care reimbursements for the previous year no later than January 31 of the following year.
What if there are funds left over that I don't have reimbursements to submit? What happens to my money?

Child-care funds do not roll over. Therefore, if you have $400 in the child-care account that is not used for costs incurred by December 31st, you will forfeit a portion of the funds. Any remaining balance not used is divided amongst all of the plan participants. We then pay that money back to the participants as taxable income in the following year. Therefore, if you have remaining funds in the child-care account, you will likely only get some of the money back, as some of the money will also go to the other participants in the program.

Are foster care dependents eligible for this benefit?
 A foster child is eligible as long as the child is considered a dependent of the employee for federal income tax purposes. This means the employee must provide more than half of the financial support (Sec. 152(c)(1)(D)), the foster child must live with the employee for more than one-half of the year (Sec. 152(c)(1)(B)), the foster child must be less than 19 or a student less than 24 on December 31 (Sec. 152(c)(1)(C)), and the foster child was placed with the employee by an authorized placement agency or by judgment, decree, or other order a court (Sec. 152(f)(1)(C)). And the placement is formal (see the preceding sentence). (This is an IRS regulation.)

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