Dependent Care Flexible Spending Account (FSA)

The MIT Dependent Care Flexible Spending Account (FSA) allows eligible employees to set aside funds — before taxes — for planned dependent care services received for dependent children under the age of 13 while you work or search for work.

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Eligibility

You are generally eligible to participate in the MIT Dependent Care FSA if you work at least 50% of the standard full-time work schedule, have been appointed to work at MIT for at least three months, and are paid by MIT. Learn more about eligibility.

Time to enroll: Within 31 days of being hired, during annual Open Enrollment, or following a life-changing event. Learn more about eligibility.

Next steps

  1. Review the details of the plan
  2. Estimate your dependent care expenses for the remainder of the year to determine the amount you should contribute to the FSA.
  3. Submit an application to enroll in this plan (PDF).

Need to make a change?

If you need to make changes to your Dependent Care FSA as a result of a life event, read the Guidelines for Enrollment/Changes (second page of the Enrollment Form PDF) to learn about qualifying changes and next steps. Also, review the page within this section of the website that corresponds to your life event.

Details

How the MIT Dependent Care FSA works

  • You make contributions to your Dependent Care FSA between January 1 and December 31 and submit bills for services you receive within that same period. You can continue to submit bills for services you received during that calendar year through April 30 of the next year.
  • Estimate the dependent care expenses you expect to pay out over the year to determine the amount you should contribute to the account. You may contribute up to $5,000 each year per family.
  • Because this is a use-it-or-lose-it plan, be as accurate as you can in estimating your eligible expenses. You automatically lose any unused money left in your account after April 30 each year. You may not use this money for any other purpose, transfer it to any other account, or roll it over to the next year's FSA.
  • When you enroll, contributions to your MIT Dependent Care FSA will be deducted from your pay each pay period before taxes. MIT does not contribute funds to this account.
  • Contributions to your MIT Dependent Care FSA stop at the end of the calendar year or if you become ineligible for benefits through MIT as a result of retirement, termination, or change of appointment. In all cases, you may continue to submit claims for reimbursement up until April 30 following the calendar year in which you receive services.
  • You must re-enroll in the MIT Dependent Care FSA each year during Open Enrollment if you want to participate the next year.
  • Participation in this plan will not affect your salary for purposes of annual salary reviews, 401(k) participation, life insurance coverage, or disability benefits.
  • If each spouse contributes to a different FSA, the joint total of their Dependent Care FSA contributions for a calendar year must not exceed $5,000 for a couple filing jointly.
  • You may want to compare possible tax savings with this account to the possible savings under the Federal Dependent Care Tax Credit. Consult your tax advisor if you have questions about your situation.

Nondiscrimination Testing

MIT is required under Internal Revenue Code regulations to conduct nondiscrimination testing each year. The nondiscrimination testing assures that employer plans do not provide a more valuable benefit for highly compensated employees (according to the IRS). The preliminary testing occurs mid-year and, based on the results of the testing, the plan administrator may reduce or cancel your salary deduction or otherwise modify the amount if it is necessary to satisfy provisions of the Internal Revenue Code.

Who is eligible

  • you work at least 50% of the standard full-time work schedule
  • you have been appointed to work at MIT for at least three months
  • you are paid by MIT.

Who is not eligible

  • consultant
  • contractor
  • fellow
  • affiliate
  • teaching or research assistant
  • honorary lecturer
  • post-doctoral trainee
  • member of the armed services assigned to MIT
  • paid by MITemps

If you are a member of a collective bargaining unit, all the provisions of the MIT Dependent Care FSA are subject to the terms of your collective bargaining agreement.

What is covered

  • Generally eligible: daycare centers, summer day camps, pre-school care, and after-school care.
  • Not eligible: overnight camp and kindergarten.
  • Expenses must be employment-related in that the care was provided so that the employee and spouse or partner, if applicable, could be gainfully employed.
  • If the spouse is not working but actively looking for work or is a full-time student, dependent care expenses are generally allowable. The maximum eligible reimbursement is limited to the total income of the lower-paid spouse.
  • Only expenses for eligible dependents (see below) are covered.
  • Dependent care expenses must be paid after your coverage begins for services received during that same calendar year — you cannot receive reimbursement for expenses incurred in a different year

Who qualifies as an eligible dependent

Dependent care FSA accounts can only be used for the care of eligible dependents. The Internal Revenue Service (IRS) generally defines an eligible dependent as an individual who:

  • resides with the employee for more than half the year
  • can be claimed as a deduction on a federal income tax return
  • is under the age of 13
  • is a child or dependent adult over the age of 12 who is physically or mentally incapable of self-care
  • is a spouse of the taxpayer, if he or she is physically or mentally incapable of self-care

How to enroll

  • You may enroll in an MIT Dependent Care FSA within 31 days of your date of hire or appointment or within 31 days of the time you receive your official MIT Welcome Letter, whichever is later. You may choose to begin your coverage on the date of hire or appointment or the first of the next month.
  • The MIT Benefits Office must receive your enrollment within this 31-day period or you must wait until the next annual Open Enrollment period, unless you experience a qualifying change in your life that requires you to reassess your benefits.
  • Unlike other MIT benefits, you must re-enroll in the MIT Dependent Care FSA each year during Open Enrollment, if you want to participate during the next calendar year.

How to get reimbursed

How to make changes

  • In exchange for the tax advantages provided by an MIT Dependent Care FSA, you cannot legally enroll in, cancel, or make changes to your contribution amount outside the Open Enrollment period unless you have a qualifying change in family or employment status.
  • If you have a qualifying change in your family or employment status, contact the MIT Benefits Office to make corresponding changes to your benefits. Read the Dependent Care FSA Guidelines (second page of the Enrollment Form PDF) to find out which life events qualify you to make changes to your benefits outside the annual Open Enrollment period — and the required timeframe for making those changes.
  • Remember that you are allowed to make changes only to those benefits directly affected by the qualifying life event.
  • MIT's policy for allowing changes outside Open Enrollment in the case of certain qualifying life events is consistent with the federal Department of Labor guidelines under the Health Insurance Portability and Accountability Act of 1996.

Tax info

  • Before you decide to contribute, you may want to compare the MIT Dependent Care FSA to the federal tax credit, which applies to many of the same expenses.
  • You make contributions to an FSA every pay period on a before-tax basis — that is, federal, state, and Social Security taxes are calculated on the amount of your pay that remains after your FSA contribution has been deducted. Participation in the MIT Dependent Care FSA reduces the amount of your salary that is subject to the Social Security tax, which will result in minimal decreases in Social Security benefits for most participants whose salaries are below the Social Security wage base.

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