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August 2013 Moms
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Daycare Payflex?

babyfeikbabyfeik member
in August 2013 Moms
I'm not very good at understanding accounting and such, so could someone please help explain how the daycare Payflex works? My employer offers it and my husband an I will enroll for the next tax year. Until then we are paying out of pocket and will have to claim child are a different way for this tax year.

How does the daycare Payflex process work?
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Re: Daycare Payflex?

  • LokiLahveLokiLahve member
    Are you talking about a flex spending account?
    My company allows you to set aside x amount per pay period. The money is taken out of my check pre taxes (this is where the savings come in). I pay for childcare out of pocket and get a receipt. I then submit a claim to get reimbursed through the FSA account.
    The amount withheld each year is use or lose...if I don't submit claims for it by the end of the fiscal year I lose those funds (so make sure you aren't holding more than you actually need).
    I can't take out enough to cover 100% of my childcare expense so I will still be filing for x amount to be exempt on my taxes at the end if the year.
    I'm certainly no accountant so someone else may be able to explain this much better than I have! Hell...I may not even be 100% correct about the above, but this is how I'm understanding it. Also, my employer is allowing me to start this now...I don't have to wait until next year. That may be worth looking in to. :)
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  • silvercamaro77silvercamaro77 member
    PP nailed it. Couple of additional notes. You can adjust it at any point during the year. That's an IRS reg not an employer one bc they recognize that you may have changes that impact the amount during the year.

    Also max contribution you can make is $5k per year regardless of how many kids you have. And you have to have the money withheld prior to requesting it unlike the medical FSA where you can use the full amount at any point.

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