As part of her family's childcare plan, Nancy Holliman sends her 11-year-old daughter to camps for pottery, horse-back riding and other summer fun.
She saves on these childcare expenses by paying with money sheltered from taxes through Duke's Dependent Care Reimbursement Account. For every $1,000 deposited in the account, the Holliman family saves about $150.Read More
"It's definitely worth it," said Holliman, former director of programs for HASTAC and the Digital Media Learning Competition at the John Hope Franklin Institute for Humanities. "We see the benefits when we do our taxes."
The Dependent Care Reimbursement Account is available to all Duke faculty and staff who sign up during the annual Open Enrollment for benefits in October. Participating employees may contribute up to $5,000 per year.
Employees can use money from the account to pay for daycare, before- and after-school programs, local day camps and in-home babysitting for children under age 13 if these services are necessary to allow an employee to work.
In the past year, slightly more than 1,500 employees enrolled in the Dependent Care Reimbursement Account. They are on track to save more than $2 million in taxes because Duke takes the contributions from pay and places them in the reimbursement accounts before calculating federal, state and Social Security taxes, said Saundra Daniels, plan manager for benefits at Duke.
"It's an excellent way to save a bit of money on a fairly predictable expense," Daniels said.
Holliman, whose daughter Deva enjoyed a busy summer at Camp Riverlea in Bahama and at other local camps, pays for camps early in the year and claims reimbursement when she has proof Deva attended camp. She must also ensure that enough money has been set aside in her account to cover a bill before requesting reimbursement.
"It involves a lot of remembering to get papers signed and faxed in to request reimbursement," she said. "But for a couple hundred dollars, I remember."