$ave on your 2004 taxes;
Use Flex Spending to pay for health, dependent care

By DEBORAH STAYMAN
If you want to save money by using pre-tax dollars to pay for health care or dependent care next year, sign up soon for a Flex Spending Account (FSA). Enrollment is voluntary and must be done between September 29 and November 12.

Flex Spending is a benefit program PEF and the state negotiated to help PS&T members save money on their taxes through the Health Care Spending Account (HCSAccount) and the Dependent Care Advantage Account (DCAAccount).

Enroll on-line at www.flexspend.state.ny.us or by calling 1-800-358-7202.

How much you will save on your 2004 federal and state income taxes depends on several factors, including your annual income, the number of your dependents, and the amount of money you contribute through payroll deductions to your HCSAccount and/or DCAAccount.

How HCSAccounts work
If eligible, you may contribute any amount from $150 to $3,000 annually in pre-tax dollars to pay for out-of-pocket medical, dental, vision, or hearing costs not reimbursed by health insurance. Allowable costs include such things as dental implants, orthodontia, fees paid to non-participating providers, copayments, deductibles, laser eye surgery, contact lenses, and braille books and magazines.

You pay for these items and services up front, and then file claims by mail or fax for reimbursement from your HCSAccount. You may opt to receive the money by check or direct deposit.

You must estimate how much money you will need to cover these out-of-pocket costs next year, so you can decide now how much to have withheld from your 2004 paychecks. Don’t over estimate, because if you don’t spend and file reimbursement claims for the entire amount, you will lose any money that’s left over.

How DCAAccounts work
If you pay someone to take care for your child, elderly parent or disabled spouse while you’re at work, you can set aside up to $5,000 in pre-tax salary through payroll deduction to help pay for these expenses.

Although the state has been contributing up to $600 annually to PEF members’ DCAAccounts, that contribution is not available for 2004 because it ended when the 1999-2003 PS&T contract expired on April 1.

Examples of expenses eligible for DCAAccount reimbursement include child care expenses (up to age 13), summer day camp, before/after school programs, adult day care, home aide, housekeeper or cook (the last two must also provide custodial care to be considered eligible expenses).

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