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Daycare Costs Daycare costs can quickly add up. However, these expenses are necessary when parents or another caretaker are working. Unfortunately, in many cases, parents find themselves writing more checks then they expected for things like registration fees, supply fees, lunches, and extras for activities. Most parents want to find ways to save on daycare costs without compromising the quality of care their children receive. Save on Daycare Costs with a take care® Plan Under IRS Section 125, employers can offer their employees a cafeteria plan of benefits including flexible spending accounts. Flexible spending accounts cover qualified medical expenses not covered by any other health insurance or dependent care plan. In addition to medical expenses for co-pays and over the counter medications, flexible spending accounts can be used to cover daycare costs. The daycare expenses covered by a flexible spending account must allow you or your spouse, if you are married, to work or look for work. Both in home and out of home services can qualify for reimbursement. Registration fees, food, and incidental expenses may also be covered. These expenses do not have to come from traditional daycare facilities. Day camp, pre-k, nursery school, and after-school care are all potential qualified sources. By using a flexible spending account, these expenses can be paid for with tax-free dollars, allowing you to save money each month on daycare. Certain rules and stipulations do apply. It is important to look carefully at which daycare costs are covered by your particular plan and in your specific situation, as some expenses are covered based on income and tax filing status. It is a good idea to consult a tax professional to decide whether to take a Dependent Care Benefit or to a tax credit when filing. |
Additional Topics Consumer-Directed Health Plans Consumer-Driven Health Accounts Dependent Care Flexible Spending Accounts Flexible Health Spending Accounts Flexible Medical Expense Accounts Healthcare Flexible Spending Accounts Health Reimbursement Arrangements IRS Section 125 Cafeteria Plans Medical Expenses and Income Tax Plan for Medical that Health Insurance Doesn't Cover Save 25% to 40% on Health Expenses Save on Co-Pays and Over-the-Counter Medications Save on LASIK and Orthodontic Costs Section 125 Plan Administration |
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