Have health or dependent
care expenses? Sign up now to save $$ on 2008 taxes
By DEBORAH STAYMAN
If you act now — between September 24 and November 16, 2007 — you could
reduce the taxes you pay on your 2008 earnings.
The Flex Spending Account (FSA) is a program PEF and the state negotiated to
help members reduce their taxes through two benefits — the Health Care
Spending Account (HCSAccount) and the Dependent Care Advantage Account (DCAAccount).
These programs allow you to have the state set aside part of your pay in
special, non-taxable accounts to cover qualifying expenditures you make for
health care or dependent care.
Generally, you must pay for the eligible expense and then be reimbursed from
your Flex Spending Account. Any money in the account left unspent at the end
of the year is lost.
Renewal of participation in these programs is not automatic. So, even if you
enrolled last year for 2007, you must enroll again this year if you want to
participate in 2008.
Enrollment is voluntary. Savings will vary depending on your annual income,
the number of dependents you claim on your taxes, and the amount of money
you contribute through payroll deductions to your HCSAccount and/or
DCAAccount.
To enroll in either or both of these accounts, you must estimate your annual
out-of-pocket costs, then decide how much money to have withheld from your
paycheck. Be conservative, because if you don’t file timely claims for
reimbursement of the entire amount, you will lose any remaining funds.
You may enroll online at www.flexspend.state.ny.us or by calling
1-800-358-7202. E-mail any requests for further information to
fsa@goer.state.ny.us.
New this year
New state employees hired on or before October 31 have until November 16 to
enroll. New employees hired after that can either enroll by November 16 or
submit a change-in-status application within 60 days of their start date.
Also, beginning in mid-November, employees will be able to submit
change-in-status applications online instead of via paper.
So far, no employer contribution for DCAAccounts is available for 2008,
pending the outcome of PS&T contract negotiations.
How HCSAccount works
If eligible, you may contribute any amount from $100 to $4,000 annually in
pre-tax dollars to your HCSAccount to pay for out-of-pocket medical, dental,
vision, or hearing costs not reimbursed by health insurance.
Some examples of allowable costs are prescription drug co-payments, dental
implants, orthodontia, fees paid to non-participating providers,
deductibles, laser eye surgery and contact lenses. Reimbursement also is
allowed for certain over-the-counter drugs and supplies. A list of such
eligible items is posted at
www.flexspend.state.ny.us.Claims may be mailed or faxed, for
reimbursement by check or direct deposit.
How DCAAccount works
If you pay someone to care for your child, elderly parent, or disabled
spouse while you are at work, you can set aside up to $5,000 in pre-tax
salary through payroll deduction.
It can be used to reimburse you for eligible expenses such as child care (up
to age 13), summer day camp, before/after school programs, adult day care or
home aides. Even payments to a housekeeper or cook could be eligible if they
are also providing custodial care.
