Dependent Care Expense Account (DCEA)
The Dependent Care Expense Account (DCEA) is a program that allows you to set aside money, before taxes, from your paycheck to pay for child care expenses1 of dependent children 12 years and under. The great advantage is that you pay no federal taxes on your contributions.
1DCEA is not a plan to cover your dependent’s health related expenses. The DCEA is a plan used to pay primarily for child care expenses of dependent children 12 years and under. Please use the Health Benefit Expense Account for your dependent’s health care related expenses.
Example
If you put in $1,000 and are in a 20 percent federal tax bracket, you save $200. ($1,000 x 20% = $200.)
If you or your spouse, if married, work full time and pay for day care, day camp or after-school programs, the Dependent Care Expense Account may save you money.
Contributions to the DCEA are subject to New Jersey State Income Tax.
How the Accounts Work
Setting up the Account Annually
Each calendar year, you may choose to contribute between $100 and $5,000 into the account - $2,500 if you are married and filing separately. Elections do not automatically carry over each year. You must make a new election through e-Benefits, our online benefits enrollment system each year to participate in the DCEA, even if you are participating in the current year.
Reimbursement
When you have an eligible expense, you will have the option of:
- submitting your expenses online
- faxing or mailing the receipt with the dependent care reimbursement claim form to PayFlex to get reimbursed.
Submitted claims will be processed daily. You can arrange for direct deposit from your expense account to your personal check or savings account.
You have until March 31 of the year following the calendar year to submit claims for eligible expenses you incurred during the previous calendar year; otherwise any money left in your account is forfeited.
If you claim the dependent child care tax credit, it will be reduced, dollar for dollar, by the amount you contribute to the Dependent Childcare Expense Account. Also, depending on your household income, it might be more advantageous to claim child care expenses on your federal income tax return. You cannot claim the expenses on your tax return and use the Dependent Childcare Expense Account. Please ask your tax advise which plan is best for you.
Estimating Your DCEA Expenses
Contributions to your DCEA depend on your household needs.
- Think about how much you spend on childcare every year.
- Will you use day care or a private nanny?
- Perhaps your child is going to nursery school or day camp this year.
Estimate your expenses carefully because the IRS does not allow you to roll over unused funds at the end of the year, so any money left in the account will be forfeited .
Expense Account Worksheet
Use the worksheet below to calculate your dependent care expenses for the calendar plan year, January 1 - December 31.
You can calculate your savings on the website of our third party administrator, PayFlex Systems.
Common Childcare Expenses |
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Nanny/Au Pair (Tax ID# or Social Security # required)
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___________
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Day Care Center
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___________
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Before and After School Programs
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___________
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Day Camp
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___________
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Total estimate:
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___________
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Expenses You Cannot Claim |
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Overnight Camp
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___________
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Kindergarten tuition
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___________
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Private primary school tuition
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___________
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Day care provided by another dependent
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___________
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Day care provided “off the books”
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___________
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Total estimate:
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___________
|
You have until March 31 of the subsequent calendar year to submit claims for child care expenses you have incurred during the previous calendar year. Otherwise, any money left in your account will be forfeited.
You can count on support from knowledgeable and responsive HR staff when you have a benefits question or problem. Just call or e-mail us. We’re here to help!
While the University intends to continue each of the benefit plans, the University reserves the right to terminate or amend any plan, at any time, and for any reason.