Expense reimbursement accounts are available to employees through Section 125 Flexible Benefit plans. These options allow an employee to establish an account to reimburse certain types of expenses on a tax-exempt basis. Dependent Care Expense Reimbursement - Reimburses qualified dependent care expenses.
Employee specifies the amount to be reduced from salary for one or both reimbursement accounts.
Each month, these pre-tax payments are made to an account established in an employee's name. As qualified medical or dependent care expenses are incurred, employees submit a voucher form for easy reimbursement. Tax savings by paying for dependent daycare expenses through Section 125 are enjoyed throughout the year rather than at the end of the year as an income tax credit. You may submit claims for reimbursement as late as 90 days after the end of the plan year during which they were incurred.