Dependent Care Fraud?

[Guest macallison]

I need an answer to a Dependent care question. I was terminated by my employer on Sept 1st and received all relevant claims from my dependent care account until Sept 1st. My severance package includes continuance of pay until Dec 31,2011. However my employer will not deduct funds into the dependent care account effected Sept 1st. Here are my questions:

1. After logging into the account, I've seen that the employer is still depositing funds into the DCA (without coming off my paycheck). Why is this?

2. Can I claim those funds for Dependent Care although the deposits have not come from my paycheck?

3. Is this unlawful or just unethical?? Or both? Would IRS or Law get involved?

4. Is there repurcussions for putting in claims after a termination date although I'm still currently on payroll??

In general, whose money would I be claiming? The employer?

Help is appreciated..

[Guest morris]

The first thing to do is to get a copy of the SPD and read it.

Answers to questions:

1) It's probably a mistake on the employer's part.

2) Probably not. As soon as the employer discovers the mistake they'll want their money back.

3) Probably both. Money that goes into your Daycare account shows up in box 12 of your W-2. You're going to be messed up at tax time.

4) If you still had your own money in your Daycare account AND your SPD shows that your Daycare plan allows "spenddown" after termination, then yes you could access

your own money. But not the employer's.

In general, you would be unethically/illegally claiming your employer"s money. You should straighten this out as quickly as possible so they'll have time to straighten this out before W-2's are issued.

[SLuskin]

The daycare expenses incurred have to be employment related. So, if you are not currently employed and not looking for a job, you could not submit for expenses incurred after September 1.