Dependent Care Flexible Spending Account

If you are a highly compensated team member …

… your contributions to the Dependent Care Flexible Spending Account may be limited, depending on the participation of lower-paid team members. You will be notified if you are affected by these limits.

The Dependent Care Flexible Spending Account offers the opportunity to reduce your taxable income and lower your costs for certain dependent care expenses, and increase your spendable income. You can set aside money from your salary before taxes are calculated and then use those funds to reimburse yourself for eligible dependent care expenses.

If you are employed by Foxwoods Resort Casino, MPTN also provides access to the Childcare Reimbursement Program in order to assist you with your childcare expenses. For more information, see “Childcare Reimbursement Program,” in the Other Benefits for Foxwoods Team Members section.

How Much You May Contribute

You can set aside up to $5,000 per year in the Dependent Care Flexible Spending Account ($2,500 if you are married and filing separate tax returns). Contributions are deducted directly from your pay in equal amounts. However, if you miss a paycheck, your weekly contribution amount will be automatically adjusted so that your annual election is met.

If you are a highly tipped team member, you must have a positive paycheck (a paycheck that still has a positive balance) to be able to make contributions to a Dependent Care Flexible Spending Account. If you have a negative paycheck, the plan will track the contributions owed, and their total value will be deducted from the next future positive paycheck(s) until your outstanding contribution balance is zero.

Your contribution is automatically deducted from your pay on a before-tax basis and redirected into your account in equal amounts throughout the year.

Note that if you are defined by the IRS as being “highly compensated,” your contributions to the Dependent Care Flexible Spending Account may be limited, depending on the participation of lower-paid team members. If team member participation doesn’t reach certain benchmarks, your contributions may be restricted. You will be notified if you are affected by these limits.

If you are employed by Foxwoods Resort Casino and participate in the Childcare Reimbursement Program, the combination of dollars that you and MPTN contribute to your Dependent Care Flexible Spending Account cannot exceed $5,000 per year. For more information, see “Childcare Reimbursement Program,” in the Other Benefits for Foxwoods Team Members section. 

Divorced or Separated?

Keep in mind that you can use a Dependent Care Flexible Spending Account to be reimbursed for child care expenses only if you have custody of the child for a longer part of the year than the other parent.

If You Are Married

The IRS places certain limits on how much married couples can contribute to Dependent Care Flexible Spending Accounts, as follows:

• If you and your spouse file separate income tax returns, you can contribute up to $2,500 per year to the MPTN Dependent Care Flexible Spending Account. If your spouse’s employer has a Dependent Care Flexible Spending Account program, your spouse also can contribute up to $2,500 to that program, subject to any other limits that apply to the other program.
• If you and your spouse file a joint tax return, the combined contributions the two of you make to Dependent Care Flexible Spending Accounts cannot be more than $5,000 per full calendar year. For example, if your spouse contributes $2,000 to his or her employer’s dependent care flexible spending account, you can contribute up to $3,000 to the MPTN Dependent Care Flexible Spending Account.
• The combined contributions that you and your spouse make to Dependent Care Flexible Spending Accounts cannot be greater than your or your spouse’s earned income, whichever is lower.
• If your spouse does not work, you can only use an FSA to be reimbursed for dependent care expenses if your spouse is disabled or is a full-time student for at least five months during the year. To determine your spouse’s earned income in either of these situations, the IRS assumes that your spouse has a monthly income of $250 if you have one dependent or $500 if you have two or more dependents.

Dependent Care Flexible Spending Account vs. Federal Tax Credit

Whether you should use the Dependent Care Flexible Spending Account or the federal tax credit for dependent care expenses depends on your individual situation and other factors such as your income, marital and filing status, the amount of eligible expenses you incur, and the number of your eligible dependents. You may want to check with a tax advisor before making your final decision.

The Federal Tax Credit

The IRS permits you to claim a tax credit for dependent care expenses. The federal tax credit allows you to deduct a percentage of eligible expenses from your taxes — currently, expenses may not exceed $3,000 for one dependent and $6,000 for two or more dependents.

However, you cannot claim a tax credit for dependent care expenses that also are reimbursed through your Dependent Care Flexible Spending Account. In addition, the reimbursements you receive from your Dependent Care Flexible Spending Account reduce — dollar for dollar — the expenses that can be applied toward the federal tax credit. Therefore, carefully evaluate which tax-savings approach is better suited to your situation.

Because the current tax credit for two or more dependents ($6,000) is higher than the maximum tax-free reimbursement through the Dependent Care FSA ($5,000), you may be able to use qualified expenses over the FSA threshold toward the federal tax credit.

Taxpayer ID Required

You must submit your caregiver’s taxpayer ID number to be reimbursed for eligible expenses. Informally paid dependent care expenses or wages paid to an illegal alien are not eligible for reimbursement.

What You Can Pay For Using Your Dependent Care Flexible Spending Account

The Dependent Care Flexible Spending Account allows you to be reimbursed for expenses related to the care of eligible dependents. For the Dependent Care Flexible Spending Account, the term “eligible dependents” has a different meaning than it does for most other plans and benefits, including the Health Care Flexible Spending Account.

According to the IRS, eligible dependents for a Dependent Care Flexible Spending Account are defined as follows:

• Children under age 13 whom you can claim as dependents on your federal income tax return,
• A disabled spouse who is physically or mentally incapable of self-care,
• Any other persons whom you can claim as dependents on your federal income tax return, and who are physically or mentally incapable of caring for themselves, or
• For adults to qualify as dependents, they must spend at least eight hours a day in your home.

Eligible Expenses

Expenses relating to certain household and dependent care services are eligible for reimbursement through your Dependent Care Flexible Spending Account if those services qualify under IRS rules and:

• they allow you (and your spouse, if you are married) to work or look for work,
• your spouse attends school full-time, or
• your spouse is disabled.

These include expenses for the following:

• Licensed nursery schools and day care centers for preschoolers, as well as summer day camps for children under age 13. (Schools and centers must comply with state and/or local laws and receive a fee for their services.),
• After-school care for children under age 13,
• Services from persons who provide day care in or outside your home, except when the provider is your dependent or your child under age 19,
• Day care centers that provide nonresidential day care for dependent adults,
• Household services related to the care of an elderly or disabled adult who lives with you, and
• FICA and other taxes you pay on behalf of a day care provider.

A New Teenager in the Family?

Remember, once your child turns 13, expenses incurred for his or her care are no longer eligible for reimbursement under the Dependent Care Flexible Spending Account, and you may want to change your contribution. Your child’s loss of dependent eligibility counts as a qualified change in status and allows the opportunity to reduce or stop your contributions. See “Eligibility and Enrolling,” within this section, for more information.

Ineligible Expenses

Some expenses are not eligible for reimbursement from your Dependent Care Flexible Spending Account, such as the following:

• Application fees,
• Cost of food and clothing,
• Cost of transportation between your house and the place where day care services are provided, or the cost of transportation for a care provider,
• Cost for any person caring for your child when either you or your spouse is not working,
• Charges for convalescent nursing home care for a parent,
• Cost of schooling above the nursery school or preschool level,
• Overnight camp expenses,
• Payments for care provided by a dependent under age 19 or by anyone claimed as a dependent on your income tax return,
• Cost for dependent care that enables you or your spouse to do volunteer work,
• Expenses for which the federal child care tax credit is taken, or
• Medical expenses for your dependents.

Expense Information

Because the expenses that are eligible for reimbursement through your Dependent Care FSA are the same as those eligible for the federal tax credit, you can get more examples of eligible expenses by referring to IRS Publication 503, Child and Dependent Care Expenses. Publication 503 is available at your local IRS office or by calling the IRS at 1-800-829-3676. You also may obtain a copy online by accessing http://www.irs.gov.

Filing a Dependent Care Flexible Spending Account Claim

You need to file a claim to be reimbursed through your Dependent Care Flexible Spending Account for eligible expenses. You must include proof of payment — an itemized receipt or itemized bill from the care provider, including the provider’s name, address and taxpayer identification number — with your claim. You will not be reimbursed without proper documentation.

With each reimbursement, you receive a statement showing your balance and any payments made from your account.

When you submit a claim, you will be reimbursed up to the balance in your Dependent Care Flexible Spending Account at that time. If your account does not have enough funds to pay the full claim, you’ll be reimbursed when you make additional contributions to cover the claim.

You have until March 31 of the following year to submit claims for eligible expenses incurred through December 31. You may be reimbursed only for dependent care expenses incurred while you are contributing to the Dependent Care Flexible Spending Account.

Claims must be submitted to the Dependent Care Flexible Spending Account administrator at the following address:

Claims Administrator
Pequot Plus Health Benefits Services
P.O. Box 3620
Mashantucket, Connecticut 06338

The administrator reviews your claim and reimburses all eligible expenses. If you submit an ineligible claim, you will be notified.

If you are not satisfied with the outcome of a benefits claim you have submitted, you can ask that the claim be reviewed. See “Claims Review and Appeals Procedures” in the Rules and Regulations section for more information.

Leaving MPTN

If you leave MPTN with an outstanding Dependent Care Flexible Spending Account balance, you can submit claims or eligible expenses incurred through your last day of work.

Use It or Lose It

Be sure to estimate your expenses carefully before enrolling. At year-end, you forfeit any unused FSA balances.

When Contributions End

Your before-tax contributions to a Dependent Care Flexible Spending Account stop whenever the first of the following events occurs:

• The plan year in which you have elected to participate ends.
• You retire or otherwise end your employment (whether voluntarily or involuntarily).
• You take a leave of absence, including a leave under the MPTN leave policy that applies to your division.
• You no longer meet the eligibility requirements to participate.
• MPTN discontinues the plan.
• You die.

If your participation in the Dependent Care Flexible Spending Account ends, you forfeit any unused account balance. However, you have until March 31 of the following year to submit claims for eligible expenses incurred through December 31. You may be reimbursed only for dependent care expenses incurred while you are contributing to the Dependent Care Flexible Spending Account.