Dependent daycare elxpense

[SLuskin]

We have a participant who submitted, as part of her dependent daycare claim, the cost of a webcam that the daycare provider offers so that the parent can "see" the child during the work day.

Does anyone think this is part of the permitted dependent daycare expenses, or is it a very nice add on that cannot be pretaxed?

Thanks.

[leevena]

No way, not an eligible expense.

[Guest Sieve]

Why do you say that so unequivocably? Check out pp. 6 & 7 of IRS Pub 503 (http://www.irs.gov/pub/irs-pdf/p503.pdf), which permits payment for computer day-camp, or paid day-care even when free day care is available, and which states that the main purpsoe of the day-care is to be the individual's well-being & protection (isn't that what the video feed is for, if it's an infant?).

Certainly, it's all fact specific, but I'm not so sure that's not an eligible expense. For example, what about a $5/wk fee to launder the blankets & pillow cases if you don't bring your own nap equipment, or a $20 one-time fee for a 4-yr. old to visit the zoo on a group field trip?

[leevena]

Why do you say that so unequivocably? Check out pp. 6 & 7 of IRS Pub 503 (http://www.irs.gov/pub/irs-pdf/p503.pdf), which permits payment for computer day-camp, or paid day-care even when free day care is available, and which states that the main purpsoe of the day-care is to be the individual's well-being & protection (isn't that what the video feed is for, if it's an infant?).

Certainly, it's all fact specific, but I'm not so sure that's not an eligible expense. For example, what about a $5/wk fee to launder the blankets & pillow cases if you don't bring your own nap equipment, or a $20 one-time fee for a 4-yr. old to visit the zoo on a group field trip?

The key is "for care" types of expense. Would the "care" be there if there were no nanny cam? The answer is yes and thus does not meet the threshold.

[Chaz]

For what it's worth, I tend to agree with Leevena on this one, although it does require some thought. The $5 laundry expense probably isn't reimbursable either (but if laundry was included as part of the weekly day care fee then it might be). Whether the zoo trip would be reimbursable is probably a facts and circumstances test.

To me, the computer camp example is just explaining that the expense need not be the least expensive option available in order to be reimbursable as long as it is for care. I would argue in any event that the camera doesn't to provide for the child's "well-being & protection", it is for the parents' piece of mind. The presence of the day care provider, which is what protects the child.

[jpod]

I think you would be wise to read the proposed regulations' definition of "care of qualifying individual" before you deny the reimbursement based on some comments on this message board. The standard is fairly liberal.