Good News from the IRS!
The IRS has clarified that pre-kindergarten programs such as Preschool and Day Camp expenses may be eligible even though the underlying theme of the program is educational or recreational in nature. Even the cost of transportation furnished by day care providers may be an eligible expense. The deposits and application fees for pre-school and day camps that are attended by the dependent may be eligible for reimbursement even though these costs are not directly related to the actual cost of care for the qualified individual at the time of payment.
The IRS has also made it easier for taxpayers who pay Dependent Care expenses on a weekly, monthly (or longer) basis, with short term absences such as vacations or minor illness allowable as an eligible daycare expenses. Even tax payers who work part-time and pay daycare expenses on a weekly, monthly (or longer) basis can now include days they did not actually work as eligible expenses.
When an employee enrolls in the Dependent Care Account they agree to abide by the IRS rules related to eligible expenses, therefore we do not anticipate the requirement of additional documentation for reimbursement of covered expenses.
BenefitHelp Solutions is administering claims based on the new regulations.
