Ok, so I recently signed up for the childcare HSA and 416.66 has been taken out my check. I just got the reimbursement for...416.66. So, how exactly does this help me? I pay 760 a month for my daughter and 555 for my son, but I haven't bothered claiming my son's because I was under the impression we would reach the cap with my daughter's anyway. Please help!
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They only reimburse what you’ve paid in up to a max of $5000/yr so you’ll continue getting 416 until you reach 5000. It helps you because that $5000 is tax free so you’re saving approx 25%
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@gotkimchi: Should I also be putting in my son's? I am so sorry, I don't get this stuff... I spend 7,600 a year on my daughter's.
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I submit both kids receipts because once you submit 5000 worth you can stop submitting and they’ll keep reimbursing whatever comes out of your paychecks. So I submit both kids just cuz it’s less paperwork for me overall
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@gotkimchi: So, what happens after you pay in 5000? I almost hate to say this, but this is NOT how my brain works. Can you explain it like I am 8?
So, I won't get more back if I submit my son's? I'll just be done sooner?
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@crazydoglady: you’ll never get back more then what’s coming out of your check
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@gotkimchi: Ok, so somehow I missed the part about it being on my TAXES. 🤦♀️
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@crazydoglady: sorry I’m probably not explaining this well! But yah it doesn’t matter how much you spend total over the year there’s a max you can get back tax free which is 5000 so for example I get back 208.33 twice a month when I get paid. Total I get back over the year is 5000. I can probably stop submitting receipts in May
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@gotkimchi: I thought it was something like I had 300 taken out of my check and then got reimbursed 400 (or whatever.) This is why I don't do anything in the business world.
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@crazydoglady: well you get reimbursed with pre tax dollars and you pay with post tax dollars so like I said you’re technically getting a tax break on it but you really wouldn’t know that until tax time. It’s confusing. It’s our first year doing it as well and I’ve been trying to wrap my head around it too
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It’s sort of a tax free savings account for your daycare expense. Money comes from your paycheck pretax (reduces the amount of taxes withheld and your taxable income on your annual tax return). As you pay daycare you get your money back. The savings is in taxes. The maximum allowed per family is $5000 regardless of what your actual daycare expenses are or how many children you have. There are additional requirements like both spouses need to be working or attending school. So if one parent is not employed and you use a moms day out type program you don’t get the tax break. You can still have a FSA account but you will end up paying back the tax benefit on your annual return.
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@kimchi: Thank you for your explanation of how the HSA reimbursement works. I do not have any children yet but I am TTC and hope to be able to take advantage of the HSA in the next year or so.
I actually really like the idea of only receiving a reimbursement of what is taken out of my gross paycheck each pay period as it will be easier to budget that money than it would have been receiving larger reimbursements up front and then having to find the money elsewhere for the rest of the year. Very helpful and great piece of mind as I plan for the future!
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Chiming in to say I used to submit for reimbursement periodically throughout the year but this year we are planning to use the $5,000 to boost our savings. So I am waiting until the end of the year to submit receipts so we get the full amount reimbursed at once and I can immediately put it into our savings account.
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