IBM's Dependent Care Spending Account lets you use tax-free dollars to pay for eligible dependent care expenses. You can contribute up to $5,000 per year. If your spouse participates in a Dependent Care Spending Account, you may contribute a combined total of $5,000 each year. Remember that Dependent Care Spending Account participation is optional and you must re-enroll each year.
The money you contribute to your Dependent Care Spending Account comes out of your paycheck on a pre-tax basis (before taxes are deducted). This lowers your taxable income so you pay less in taxes.
Your participation in the Dependent Care Spending Account is allowed only if you need dependent care to enable you and your spouse to work, or you to work and your spouse to attend school full-time. Some eligible Dependent Care Spending Account expenses include:
- Care in an eligible day care center or from a baby-sitter or other day care provider (a baby-sitter cannot be a child or a dependent under age 19).
- Day camp
- Elder care
You can also put money into your Dependent Care Spending Account to pay certain eligible care expenses for:
- Your dependent children under age 13 who are claimed as dependents on your federal income tax return, or if you are divorced or separated, live with you for at least six months during the year.
- Your dependent children over age 13, or your spouse or parents if they're physically or mentally incapable of caring for themselves are claimed as dependents on your federal income tax return, and who spend at least six months a year in your home. Note: Expenses for the care of a domestic partner are not eligible unless he or she is claimed as a dependent on your federal tax return.
After you join IBM, you will be able to choose to participate in a Dependent Care Spending Account when you enroll in your IBM health benefits on Fidelity NetBenefits. Choose the amount you want to contribute to your Dependent Care Spending Account — from $20 to $417 monthly, up to a maximum of $5,000 per year. IBM will deduct your pre-tax contribution from each paycheck.