IRS Issues New Regulations Regarding Dependent Care Under a Flexible Spending Plan
Earlier this week, the Treasury Department issued final regulations related to the dependent
care credit. Dependent Care as it relates to a Flexible Spending Account relies on these
rules. The regulations basically clarified current rules, however there were a few
additions.
First, the new regulations confirm that Kindergarten expenses are not qualified expenses under the Dependent Care FSA account.
Additionally, the rules addressed circumstances regarding children who reside in a households in which one spouse works a night-shift and the other works a day-shift. Child care that is required during the time when the night-working spouse is sleeping, is a qualified expense.
Finally, the regulations state that employees are not required to allocate Dependent Care expenses during a short, temporary absence from work, such as a vacation or minor illness, as long as they are still required to pay for care during the absence.
None of the new regulations will cause any changes to FlexSystem's current Plan administration.