Author Topic: FSA childcare with nanny from care.com?  (Read 1513 times)

Swat

  • 5 O'Clock Shadow
  • *
  • Posts: 48
FSA childcare with nanny from care.com?
« on: December 11, 2016, 07:27:23 AM »
We just had our first baby and will be returning to work in early 2017. We just found a great nanny off of care.com. We will be paying her via check on a weekly/monthly basis depending upon how many hours we use her for.

Iím just curious, am I able to use the flexible spending account for childcare for something like this? I know we could if we used a formal daycare but I wasnít sure if that was the case when we hire a ďprivateĒ nanny. And if it is possible, how do I do this if Iím paying the nanny via check. Is there a best way to reimburse myself? Iím just unfamiliar with this whole area but know there are potential for big savings and would appreciate some guidance.
Thanks!

MicroRN

  • Handlebar Stache
  • *****
  • Posts: 1020
Re: FSA childcare with nanny from care.com?
« Reply #1 on: December 11, 2016, 07:44:57 AM »
Yes, you can still use an FSA with a nanny.  When you request reimbursement, you might have to enter their SSN (our FSA requires that).  Your FSA might have certain rules for reimbursement documentation, so check with them before you get going.  You can make a paystub for the checks and then keep a copy of the deposited check.  Those are good to have for tax purposes anyway.  Any hint of a nanny makes the IRS perk up because so many people pay their nannies illegally, so keeping the paperwork in order is really important.  We opted to just pay for a payroll company to manage it, but it can be done individually too.     


Daleth

  • Handlebar Stache
  • *****
  • Posts: 1201
Re: FSA childcare with nanny from care.com?
« Reply #2 on: December 11, 2016, 07:59:20 AM »
With my FSA I had to either use a paycheck service (one that did all the deductions, etc.) and provide paystubs with each request for reimbursement, or have the nanny sign each request. She wanted paychecks with all deductions made so that's what we did. Either way you have to provide her SSN.

MsPeacock

  • Handlebar Stache
  • *****
  • Posts: 1527
  • Location: High COL
Re: FSA childcare with nanny from care.com?
« Reply #3 on: December 12, 2016, 09:34:00 AM »
You can absolutely claim the nanny, but you must be paying her legally.  Care.com offers a payroll setting down for household employees. I was using Intuit but they will no longer have it as of December 31. I found the whole payroll thing really complicated.

On the FSA form I had to have the nanny sign the statement for the amount paid. The program would not accept cancelled checks as evidence (likely because that is easily falsified).
« Last Edit: December 12, 2016, 09:45:48 AM by MsPeacock »