Flem- Re: flex spending account

REOM

You mentioned that you can't use it if both parents aren't employed.  Well, I was working as of June, and won't go back to work until next Sept.  We have continued to submit the daycare receipts.  Will they catch up to us somehow ?  I don't remember ever being asked if both parents were working...

Flem052204

When you do your taxes, there is a worksheet to figure out if you qualify.  You don't submit that form with your taxes but you are supposed to keep it in case you are audited.  FSA's are really supposed to be used to help parents who are woking, in school, etc.  There are other exceptions, like if you use childcare while you are actively seeking employment (the two hours you spend each day sending out resumes, etc.) and I think if you are caring for a disabled family member.  But by the letter of the law, they are not supposed to be used so you can have someone watch DC so you can get your grocery shopping done.

Those are the guideline but I don not believe the IRS actually tracks it.  The part of the documentation they seem most interested in is getting the taxpayer id info from the childcare provider so they can make sure the CCP is paying taxes on what you pay her.

Don't worry, you aren't in any trouble yet.  If you use turbo tax to do your taxes, it will give you an alert that says something to the effect of "we noticed that you used a childcare FSA but you had no reported income from an employer this year.  Do any of the following apply to you...full time student, etc?  If you answer that you were not seeking employment, a student, etc, then it will figure out the taxes that should have been paid on your FSA contibution for which you were not eligible.

REOM

Thanks for the info, I really wasn't aware of that.  Technically, I am employed, just on a Leave of Absence.  Hopefully it won't be a problem.

Thanks again for the reply