The Money Mustache Community
Learning, Sharing, and Teaching => Taxes => Topic started by: COEE on March 18, 2017, 06:27:16 AM
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I have a problem that I hope someone can give me some suggestions on. I currently have $1900 in my dependent care spending account - and I'm having difficulty convincing them to release it to me. Another $645 will be put in the fund before the end of the contribution period.
Background: My dFSA dates are 6/1/16 - 5/31/17. My daughter is in full-day kindergarten. My state (CO) pays for the first half of the day and I pay the second half of the day. On 5/10/2016 (I wrote the date down in my notebook) I spoke with Mary at my dFSA provider (ADP) and asked if the tuition for my full-day kindergarten would be covered. She said it would be because it's equivalent to after-school care and not required by the state. I just needed to note that this is for 'after-school care' on the forms and that I'd be good.
So Great! I put $3000 in to cover the school year so I can save $.15 per dollar. The problem is that they won't pay me now because the receipts say 'Kindergarten Tuition' on them instead of 'After-School Care'. And of course they don't remember the conversation I had with Mary. The school has been basically no help and have told me it's my problem and won't help me with anything.
ADP has honored a couple claims for fees and stuff that I've incurred. But that's totaled about $500. My daughter was in a couple of summer activity classes last summer that I was going to try to get expensed this weekend. This will get me back another $1000 or so IF they go through... leaving another $1500 sitting in the account.
So I'm looking at $1500 - $2500 left sitting in my account. Any ideas? I've started thinking about pre-paying for summer school with this money, but I also think they will only reimburse expenses after they've been incurred and this fund closes on 5/31/17... just as summer programs are starting up.
I also noticed that I can put unused dependent care funds in my taxes - but I'm not sure if that ends up being a credit back to me or not. I would gladly pay $.15 just to get my money back. I'm also not sure if half of this goes on my 2016 taxes with the other half on my 2017 or if they all go on my 2017 taxes.
This one is keeping me up at night. I'll probably never contribute to a FSA of any kind ever again. The headache and loss of sleep is not worth $.15/dollar. Do I just eat the money? It's not a small fraction of NW, but it's not a huge portion either. Just call it the 'stupid tax' of trusting the company I work for to give me accurate information to make decisions with.
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Could your "nanny" or "housekeeper" give you a receipt for childcare?
https://www.wageworks.com/employees/support-center/dcfsa-eligible-expenses-table
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Often they have a claim form that you can use rather than submitting a receipt. You fill out the details, and then get someone at the provider to sign saying that it is accurate. As long as you have someone in administration billing you can talk to and get them to sign the claim form. Then you can avoid getting a receipt to justify the spending to dFSA custodian.
Technically, you will still need an actual receipt to satisfy the IRS if they audit you. But it's not required to file, and your supporting documentation about the details should be enough to satisfy them if you really needed to.