Dependent Care FSA Flexible Spending Account Lake County Schools, Risk Management Department April 17, 2017

What is a Dependent Care FSA? Pre-tax account that pays for eligible dependent care expenses while you work: Preschool or before/after school programs Summer day camp Elder daycare Smart, simple way to save money while taking care of loved ones so you can work [Employer Name] sponsors this program, brought to you by take care by WageWorks, to help you save on important health and dependent daycare expenses by using pre-tax dollars. Your FSA can cover a wide range of needs, for many of the big out-of-pocket expenses and everyday purchases that you already pay for. You decide whether to open a healthcare account, a dependent care account, or both. And you choose how much to set aside for expenses during the plan year. You can use money from your FSA for yourself, your spouse, or any of your eligible dependents, even if they are not covered by your health plan. And the program is designed to be as simple, fast, and convenient as possible. Saving has never been this easy. It’s important to remember that the money in your FSA does not roll over from year to year, so make sure to calculate your expenses carefully when planning how much to set aside for the year. The calculator at www.wageworks.com/takecare-mydcfsa is a great place to start.

Why You Need It Save an average of 30% on the dependent care you need Reduce your overall tax burden since funds are withdrawn from your paycheck before taxes are deducted Take advantage of several convenient, no-hassle payment and reimbursement options The program works by setting aside some of your pay before taxes are deducted. The money is still yours to spend on eligible expenses, but you don’t pay taxes on it. Before you enroll, you should estimate your dependent daycare expenses for the upcoming year, so you can decide how much to set aside through your FSA. WageWorks offers easy online calculators that help you project these expenses, plus you’ll find examples and a worksheet in your enrollment materials. Then choose how much to defer in each account when you enroll. Your savings works by reducing the amount of your income that’s subject to federal income tax, FICA (Social Security) tax, and in most states, state income tax. Exactly how much you save depends on how much you spend on healthcare and dependent care expenses each year, and on your tax situation. Most people can save from $30 to $40 in taxes for every $100 set aside through their FSA.

How It Works Determine how much to contribute Estimate how much you’ll need Elect how much to contribute Funds are taken from your paycheck before taxes Start saving up to hundreds of dollars in one year Savings result from lower overall taxes The program works by setting aside some of your pay before taxes are deducted. The money is still yours to spend on eligible expenses, but you don’t pay taxes on it. Before you enroll, you should estimate your healthcare and/or dependent daycare expenses for the upcoming year, so you can decide how much to set aside through your FSA. WageWorks offers easy online calculators that help you project these expenses, plus you’ll find examples and a worksheet in your enrollment materials. Then choose how much to defer in each account when you enroll. Your savings works by reducing the amount of your income that’s subject to federal income tax, FICA (Social Security) tax, and in most states, state income tax. Exactly how much you save depends on how much you spend on healthcare and dependent care expenses each year, and on your tax situation. Most people can save from $30 to $40 in taxes for every $100 set aside through their FSA. Be sure to estimate your annual dependent care expenses and make your contributions carefully. Any money left unspent in your Dependent Care FSA at plan year end is forfeited.

How You Use It Pay Me Back Get reimbursed quickly for payments you make It’s your money. Your FSA just helps you save it from taxes, and gives you control over how you spend it on your health and your family. The program is built for maximum convenience and control. You choose when and how to spend the money in your account. Use Pay My Provider to make direct payments online to health and dependent care providers. You can even set up automatic payments for ongoing needs like child care. Or use Pay Me Back to send in traditional claims, and get quick reimbursement. To keep track of your money, you can get information about your account balance, recent activity, claims in progress, and more at any time with the convenient online tools at www.wageworks.com.

Who Qualifies? Qualifying dependents include: Dependent child* under the age of 13 who lives with you for more than half of the year; or A spouse or other tax dependent who resides in the house a minimum of eight hours a day and requires assistance with day-to-day living. In the case of divorce, IRS guidelines state that a child is a qualified dependent of the "custodial parent." Only the custodial parent may participate in a dependent care FSA. A divorced, non-custodial parent cannot be reimbursed under a dependent care FSA even if the divorced parent claims the child as a tax dependent. *In the case of divorce, IRS guidelines state that a child is a qualified dependent of the "custodial parent."

How You Manage It Use take care® MyFlexsmMobile app File a claim and get reimbursed quickly View transactions and benefit account balances using a single login Receive confirmation emails when claims are received, processed, or paid Receive text messages when card verification is required, a transaction is denied, or a claim has been processed Or online at takecareWageWorks.com

How Much You Can Contribute Maximum of $5,000 IRS sets the contributions guidelines Changes to your election amount can be made only if there is a: Change in legal marital status Change in number of dependents due to birth, adoption, or death Change in employment status Change in cost or coverage charges If you pay to care for dependents while you’re at work, choose a dependent care account to pay for most kinds of babysitting, day care, preschool programs, and more, plus elder care services for qualifying older adults. Your dependent care FSA typically covers these types of expenses that allow you to work. The eligible expenses specific to your FSA are defined by the IRS and [Employer Name]. For more information and a detailed list, check out the information available at www.wageworks.com/takecare-mydcfsa.

Eligible Expenses Use your Dependent Care FSA to pay for: Before/after school care Au pair services Extended day programs Preschool/nursery school Summer day camp Elder daycare Ineligible expenses include: Overnight camps Kindergarten or higher-grade tuition Non-work-related day care Long-term elder care services Here are some of the most popular dependent care expenses that are typically covered by your FSA. For more information and a full list of expenses, check out the information available at www.wageworks.com/takecare-mydcfsa See www.wageworks.com/takecare-mydcfsa for more information on eligible expenses

Why Enroll? Tax savings Wide range of covered expenses Easy access Flexible options No matter who you are, whether you’re just starting out, or taking care of a family, you can find a great reason to enroll in your FSA. Everyone loves the tax savings that comes with an FSA. Who doesn’t like to save money? You’ll save on dependent care—that you pay for anyway Between MyFlexsmMobile app, direct online payments, and rapid reimbursement, it’s never been easier to save. It’s your money. Your FSA lets you save and spend it the way you choose. With all this going for it, there’s really no reason NOT to enroll in your FSA. Make sure to sign up during benefits open enrollment!

How You Get It Enroll online or by phone: Follow Lake County Schools Open Enrollment instructions Visit Lake County Schools, Risk Management, FSA Dependent Care Or call (352) 253-6600 Enrollment is easy. Just follow the instructions in your open enrollment materials. [Employer-specific instructions here.] But make sure you enroll in time! Typically you can only sign up during your regular, annual benefits open enrollment period. You may be able to change your election if you experience a “qualifying event” during the year such as getting married, having a child, or changing your work status. Please see the open enrollment materials for details.

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