FOREWORD - Wentworth Institute of Technology

WIT Employee HandbookSection IV: BenefitsIV G. DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTThe Dependent Care Flexible Spending Account as part of Federal Tax Code,Section 125 legislation allows employees to pay for certain dependent careexpenses on a pretax basis rather than a post-tax basis. Employees should projectwhat their annual dependent care expenses are and determine if the federal incometax credit is better than the Dependent Care Flexible Spending Account. A good ruleof thumb is that employees with an adjusted gross family income of $24,000 or lessare better off using the income tax credit. Those making higher amounts shouldconsider this flexible account.The Dependent Care Flexible Spending Account can be used to reimburseemployees for expenses they incur for dependent child care (day care), or for adultdependent care if that dependent care is needed to allow the employee and spouseto work or go to school full time. In both instances the dependent must beconsidered dependent for tax purposes and claimed as such on one's annual taxreturn.The amount on account, which is processed through payroll, is regulated by federalstandards. The amount set aside should cover only predictable expenses sinceunused amounts are forfeited at the end of the calendar year. The employee's W-2will show the amount of dependent care expenses that were reimbursed but thatamount will not be taxed.Each December, a letter and an enrollment form are sent to the Wentworthcommunity announcing the open enrollment for dependent care. Contact the HumanResources Department for complete plan information and procedures.HEALTH CARE FLEXIBLE SPENDING ACCOUNTThe Health Care Flexible Spending Account allows employees to pay for certainhealth care expenses on a pretax basis rather than a post-tax basis. Employeesshould project what their annual health care expenses are and determine they willuse that amount within the calendar year. The minimum amount that an employeemay contribute is $260/year; the maximum amount is $2600/year. Enrollment formsare downloadable from the Human Resources webpage under the EmployeeResources tab on Lconnect. For example of eligible pre-tax health care expenses,please visit www.flexdirect.com.IV H. SURVIVOR BENEFITMarch 200950