6.5. ERMUSR 01-15-2008 - Laserfiche WebLink

Home Browse Search

ARTICLE XII. DEPENDENT CARE EXPENSE REIMBURSEMENT PLAN 12.1 Separate Written Plan. For purposes of Section 129 of the Code, this Article shall constitute a separate written plan providing reimbursement of Dependent Care Expenses. To the extent necessary, other provisions of the Plan are incorporated by reference. 12.2 Purpose. The purpose of this DC Plan is to provide Participants with the option of being reimbursed for eligible Dependent Care Expenses. The DC Plan is intended to qualify as a dependent care assistance program under Section 129 of the Code so that payments received under this portion of the Plan are excludable from the gross income of the Participant under Section 129(a) of the Code. 12.3 Definitions. (a) Dependent Care Account ("DC Account") means the record keeping account established by the Plan Administrator for each Plan Year for each Participant from whom an Election to create such an account is received. (b) Dependent Care Center shall have the meaning given such term in Sections 21(b)(2)(C) and 21(b)(2)(D) of the Code: a facility that (i) complies with all applicable laws and regulations of the state and town, city or village in which it is located; (ii) provides care for more than six individuals (other than individuals who reside at the facility); and (iii) receives a fee, payment or grant for providing services for any of the individuals (regardless of whether such facility is operated for profit). (c) Dependent Care Expenses means amounts paid by the Participant for services that if paid for by a Participant would be considered employment-related expenses under Section 21(b)(2) of the Code and under applicable proposed or final regulations issued thereunder. Employment-related expenses for purposes of this Plan include expenses incurred to enable a Participant to be Gainfully Employed during any period for which there are one or more Qualifying Individuals with respect to the Participant for (1) household services and (2) care of a Qualifying Individual. However, employment- related expenses which are incurred for services outside the Participant's household shall be considered Dependent Care Expenses only if incurred for the care of a Qualifying Individual described in Section 12.3(h)(1) below or a Qualifying Individual not described in Section 12.3(h)(1) below who regularly spends at least eight (8) hours each day in the Participant's household. Dependent Care Expenses do not include expenses which are incurred for services provided by a Dependent Care Center if such center does not comply with all applicable laws and regulations of the applicable State or other unit of local government which regulates the center. In addition, Dependent Care Expenses shall not include any amounts paid to an individual (i) who is a child of such Participant (within the meaning of Section 152(f)(1) of the Code) who is under the age of nineteen (19) at the close of such taxable year, or (ii) with respect to whom, for such taxable year, a deduction is allowable under Section 151(c) of the Code (relating to personal exemptions for Dependents) to such Participant or the Spouse of such Participant. (d) Earned Income shall have the meaning given such term in Section 32(c)(2) of the Code (which refers to wages, salaries, tips and other Employee compensation as well as net earnings from self-employment), but shall not include any amounts reimbursed by the Employer under this portion of the Plan. Further, if a Participant's Spouse is a Student or incapable of caring for himself or herself, the provisions of Section 21(d)(2) of the Code shall apply in determining the Earned Income of that Spouse. Generally, this Section provides that a Spouse of a Participant shall be deemed to have Earned Income of not less than $250 per month if there is one Qualifying Individual with respect to the ©2007 Hitesman & Associates, P.A. 27 Elk River Municipal Utilities 122707 Flexible Benefits Plan