Dependent Care Reimbursement Accounts (DCRA)

Carnegie Mellon allows full-time benefits-eligible faculty and staff to put aside money from their pay on a pre-tax basis, to cover anticipated dependent care expenses while you work or attend school. This can save you 25% or more on the money you set aside (depending on your federal tax rate).

Contributing to a DCRA 

• Up to $5,000/year. (Minimum contribution is $300/year.)
• Contributions will be deducted in equal amounts each pay period. You may contribute over 12 months or 9 months (required for those paid over 9 months; no contributions Jun-Aug)
• Expenses cannot be reimbursed in anticipation of contributions.  You may only request money that has actually been contributed.

Eligible Expenses

• Qualified dependent care expenses.  Examples include: daycare or sitter fees, before/after school care, summer day camps, and elder care for a parent living in your home.
  • See Ceridian's Eligible Expenses for Dependent Care Accounts (.pdf) summary or the Dependent Care Reimbursement IRS Publication #503 (.pdf) for a complete list of covered expenses.
  • Ceridian's FSA Contribution Calculator can help you determine how much to contribute to a DCRA.
    
• Expenses incurred by your IRS-qualified dependents may be reimbursed by the DCRA.  (Only children for whom you are a legal parent/guardian and can be claimed for federal tax purposes may be covered.)
• Expenses for children under age 13 or other dependents who are disabled and incapable of caring for themselves.
• Both parents must be working or attending school to be eligible.
• Expenses must be incurred during the plan year, while you are contributing.
  • If you initiate an account mid-year, you can only seek reimbursement for expenses incurred AFTER you enrolled.
  • If you increase your contributions due to a life change, additional contributions can only be used for expenses incurred AFTER the event.
  • If you stop contributing, you can only use the funds to reimburse claims incurred during your participation.

Tax Implications

• Benefits received through Cyert Center and any other tax-free child care benefits and contributions made to the DCRA are limited to $5,000 by the IRS. To see how benefits received from the Cyert Center offset the amount you can contribute tax-free to the DCRA, read Child Care Benefits - Tax Implications (.pdf).
• The IRS allows you to claim work-related, dependent care expenses when you file your income tax return. You cannot use both the tax credit and the Dependent Care Reimbursement Account for the same expenses.
• The tax regulations regarding this benefit are complicated for those who use the Earned Income Tax Credit. Review the instructions published by the IRS carefully or consult a tax expert for advice.

Consult a tax professional for information on how DCRA benefits impact tax credits or exemptions for which you may be eligible.