DCFSA - Qualifying care

[bcspace]

I understand (from IRS pub 503) that the educational level for qualifying care is kindergarten and below such as, for example, a nursery or pre-school.

However, what about private schools that don't have a system that distinguishes from kindergarten and above or kindergarten and below. How can we tell if it's qualifying care? Is there an age at which we will say, your child is in kindergarten, it is not qualifying care? Do we just fudge it?

Thanks for all your help so far.

[J Simmons]

I think it would be easier to defend if you only attempted to DCFSA the expenses of the child in the private school while of an age that he would be in kindergarten or younger, rather than 'fudge it' at older ages.

[LRDG]

According to IRS, "employment related' kindergarten expenses were previously defined by the tax payer as being primarily for employment purposes, with the educational benefit being incidential to employment related child care provided, applied to DCFSA or child care tax credit.

This was true regardless if kindergarten was provided in a school environment, (for instance k-6 or 12 school, public or private, accredited or not), or if kindergarten was provided at a pre-school facility that provided infant care through kindergarten care, or an individual providing care in their home with no educational benefit.

The defination was refined by the IRS a couple of years ago. The refinement states if there is any educational benefit associated with the care or an educational institution provides kindergarten care, educational benefit is no longer considered incidential, becomes primary purpose for the care/expense.

To be IRS qualified expense, the care must be "employment related", meaning both parents employed/one disabled parent/student-parent, or employed single parent. Becoming a purely educational benefit, the expense is no longer employment related and is not qualified. If employment related kindergarten care is provided at a facility providing infant care through kindergarten care, it can be considered employment related eligible child care expenses, or an individual providing care in their home with no educational benefit.

I personally feel it's a hard stand for IRS to take, education is emphasis for care provided to the youngest of children. It's silly or foolish to think that any parent is sending a child, even 2 or3 year olds, to a setting that is absent the benefit of educational instruction. Considering the cost associated with child care, educational benefit should be demanded for even early child care and for working parents kindergarten expenses should qualify.

Also in the past the favorable tax treatement of kindergarten expenses was favored and justified because a tax payer provided public school education is available to all US residents, supported via taxes, manditory attendence enforced by law in most communities with age requirements, beginning with 1st grade.

Expenses for before/after school care and summer day care for school age children no more than 12yoa continue to be qualifed expenses, and have not changed as a result of the IRS re-characterization of kindergarten expenses.

[GBurns]

I did not think that there would be a school that did not differentiate day care, pre K and K from the other grades at which actual subject teaching is taught. So I guess that the best thing to do would be to corelate with the age/grade system in use by the public school system.