Q.- An employee is asking if day care expenses for her intellectually disabled 16 year old child are eligible for reimbursement from her Dependent Care FSA. What information do we need to request to check disability so she can be reimbursed for his eligible expenses?
A.- For a child’s expenses to be eligible for reimbursement after age 13, the child must be someone who (1) is physically or mentally incapable of caring for themselves and (2) has the same principal place of abode as the taxpayer for more than half of the year.
IRS Publication 503 explains “incapable of self-care” as : “persons who cannot dress, clean, or feed themselves because of physical or mental problems,” or “who must have constant attention to prevent them from injuring themselves or others.”
Ultimately it is the employee’s responsibility to determine and document that the individual for whom expenses are being reimbursed is an eligible dependent. The employee (not the FSA plan)has to keep records or other evidence to substantiate dependent care FSA expenses.
The plan could either (a) take the employee’s direction since the employee attests when submitting the expense that it is an eligible expense for an eligible dependent; or (b) if the plan wants to get documentation from the employee before allowing the reimbursement, review a doctor’s letter stating the child is physically or mentally incapable of self-care.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.