You may use a dependent care Flexible Spending Account (FSA) to be reimbursed for day care expenses for your dependents so that you (and your spouse if you are married) can work or attend school.

The advantage of using a dependent care account is your contributions are made on a pre-tax basis. This means you're using tax free money and you're lowering your taxable income.

The dependent care FSA allows you to set aside pre-tax dollars to be reimbursed for eligible dependent day care expenses that are necessary for you (and your spouse if you are married) to work or attend school. By using the FSA, you can be reimbursed for dependent day care expenses for:

• Your dependent children including your biological children, adopted children or stepchildren, up to age 13.
• An elderly parent, spouse, or child who is incapable of self care, who spends at least eight hours a day in your home and is dependent on you for support.

• $5,000 if you are married filing taxes jointly with your spouse or , if you are single filing taxes as head of household.
• $2,500 if you are married filing a separate tax return.

In addition, the most you can contribute to the dependent care FSA cannot be more than you or your spouse's income. If your spouse is a full-time student or is incapacitated, special income assumptions apply as follows: If you have one dependent, your spouse's income is considered to be $250 per month ($3,000 per year), or $500 per month ($6,000 per year) if you have two or more dependents.

Be sure to check our the dependent care FSA Estimator located in the Medical Plan Decision Toolkit to help you calculate your Dependent Care expenses.

"Use it or lose it"
Tax advantage accounts have certain tax advantages, therefore the IRS regulates them. By law, any funds not used for services during the year will be lost. In other words, you need to use the money in your account or you'll lose it. See the www.irs.gov Web site for the complete list of qualified expenses, Publication 502.

Changing your health care FSA contribution amount mid-year can only occur if you experience a qualifying status change. Contact Farm Credit Foundations for more information.

Amount Available for Reimbursement
Dependent care contributions deposited as of the date you file a claim are available for reimbursement. If your claims exceed the balance in your dependent care FSA, you will be reimbursed only up to the total amount you have contributed to date. The non-reimbursed amount will be pended in the account until there are funds available.

Filing a Claim for Reimbursement
To receive reimbursement from your dependent care account you must file a claim form.

Online Banking
Bank of America offers online banking features for FSA participants.
Preview Bank of America's Web site and reimbursement flash video.

• Year-End - You have until March 31st to file claims for expenses incurred during the prior plan year. Any money left in the account after March 31st will be forfeited.
• Mid-Year termination of participation - If you retire, leave the organization or cancel your FSA account mid-ear, you have 90 days to submit your claims to Bank of America for reimbursement. Any money left in the account will be forfeited.

• IRS regulations govern the administration of all spending accounts and restrict the way in which money in FSA accounts can be used.
• IRS prohibits using spending accounts to pay the health care insurance premiums of another plan.
• Not all expenses allowed on tax returns are eligible for FLEX reimbursement.
• Dependent Care expenses allowed for tax return purposes are listed in the Internal Revenue Service (IRS) publications 502 and 503. 
• See the www.irs.gov Web site for more details.