PUBLISHED October 20, 2014 IN Campus, Academics, Working@Duke

How to Save Money on Dependent Care

Use the Duke benefit to set aside pre-tax money for daycare and after-school programs

Heather Gaudaur, left, with her husband and son. Photo by Red Bridge Photography, LLC

By April Dudash

When Heather Gaudaur found out she was pregnant, she began scoping out daycare options near Duke. She and her husband selected The Little School at Duke, where their son Samuel has been enrolled for almost a year.

And to help pay for childcare expenses, which can add up to more than $1,000 a month, Gaudaur enrolled in Duke’s Dependent Care Reimbursement Account, which allows staff and faculty to make pre-tax contributions to the account from their pay.

Save Money Using Reimbursement Accounts

Wayne Staton holds the WageWorks card he uses to pay for eligible health expenses using tax-free money.

Sign up or re-enroll in Duke’s Dependent Care or Health Care reimbursement accounts during Open Enrollment Oct. 27 to Nov. 7.

Employees with a young child or a parent or spouse who cannot care for him or herself may wish to consider a Dependent Care Reimbursement Account. Employees can contribute up to $5,000 in pre-tax dollars for day care, preschools, elder care services, adult daycare facilities, services for disabled dependents, and before- and after-school programs for children under age 13.

The Health Care Reimbursement Account allows up to $2,550 in pre-tax contributions per year and the roll over of up to $500 of unused funds into the following plan year. Learn more about the benefit through Wayne Staton (pictured above), a supervisor in Duke Corporate Accounts Payable, who used the account to pay for dental expenses.

For additional questions, please call (919) 684-5600 or send Duke Benefits an email.

“It helps with the overall picture of expenses, because having a kid is expensive,” said Gaudaur, a Compensation and Rewards senior associate at Duke. “Daycare’s expensive. It’s just nice to save some money.”

During Open Enrollment from Oct. 27 to Nov. 7, Duke employees have the opportunity to enroll or re-enroll in the Dependent Care Reimbursement Account. They can contribute up to $5,000, tax-free, for day care, preschools, summer day camp, and before- and after-school programs for children under the age of 13.

Employees can save about $30 in taxes for every $100 of eligible expenses paid for by using the Dependent Care Reimbursement Account, said Saundra Daniels, voluntary benefits plan manager for Duke Human Resources.

“These are expenses that you’re going to pay for if you and your spouse or partner have a child and are both working outside of the home,” Daniels said. “You already know what your month-to-month daycare expenses are, so why not use the benefit to keep more of your hard-earned money in your pocket?”

The Dependent Care Reimbursement Account can also be used to save on other types of dependent care, such as elder care services, adult daycare facilities, or services for disabled dependents. Those individuals must be claimed as a dependent on the Duke employee’s federal income tax return.

Employees who enroll during Open Enrollment can elect how much to contribute, which will then be automatically deducted tax-free from their paycheck and put in the dependent care account. The maximum contribution is $5,000.

“I knew how much we were going to spend for the whole year for daycare, and I looked at my monthly budget and saw we could contribute the full amount,” Gaudaur said. “There are a lot of different ways to save money when you have a kid, and this is one of them.”