Can I pay my child provider more than she ask due to whitholding too much in my dependant FSA?

[Anonymous]

I don't know whether it is an IRS requirement or my company's specific FSA, but I am pretty sure the provider has to confirm that the services were rendered in the actual time period. So at least for me, prepaying would not work. You may want to check with your FSA plan to confirm this. I would pay grandma and offer to help her file her taxes - if that's her only source of income, doing her taxes should be easy, and much cheaper for you than losing several thousand dollars.

[Anonymous]

Anonymous wrote:I don't know whether it is an IRS requirement or my company's specific FSA, but I am pretty sure the provider has to confirm that the services were rendered in the actual time period. So at least for me, prepaying would not work. You may want to check with your FSA plan to confirm this. I would pay grandma and offer to help her file her taxes - if that's her only source of income, doing her taxes should be easy, and much cheaper for you than losing several thousand dollars.

I don't get how it's cheaper for OP -- she's still not getting the money back, it's just going to grandma instead of her FSA administrator, right?

[Anonymous]

Grandma could then give the money back to her.

[Anonymous]

Anonymous wrote:Grandma could then give the money back to her.

Isn't that totally illegal? I wouldn't feel comfortable doing that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't know whether it is an IRS requirement or my company's specific FSA, but I am pretty sure the provider has to confirm that the services were rendered in the actual time period. So at least for me, prepaying would not work. You may want to check with your FSA plan to confirm this. I would pay grandma and offer to help her file her taxes - if that's her only source of income, doing her taxes should be easy, and much cheaper for you than losing several thousand dollars.

I don't get how it's cheaper for OP -- she's still not getting the money back, it's just going to grandma instead of her FSA administrator, right?

Yeah, I guess "cheaper" was the wrong word to use. I should have said "more beneficial". Because at least in my mind, I would rather have my mom/MIL (or whoever is the family member that's "grandma") get the money instead of the FSA administrator. My point was, filing a simple tax return is a small price to pay to get several grand. If grandma really doesn't want the money, she can give it right back to OP or the kid in form of a gift.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Grandma could then give the money back to her.

Isn't that totally illegal? I wouldn't feel comfortable doing that.

Grams could buy clothes/gifts for the kids with the money or take them places. Some of it could just be a nice thank you for Grams too.

[Anonymous]

It wouldn't be illegal but it doesn't solve the problem of Grandma not wanting to file a return. Couldn't you help her with her return? E-File, Quickbooks, $50 or something.

[Anonymous]

If your daycare allows you can actually make a larger payment to the facility, which would just give you a credit for the next month or two. I did this at my dentist office for the medical FSA. I had 2 appointments that had to be a week apart, and the first was in the end of Dec, the second first week of Jan, so I made the payment of whatever was left on the FSA at the first appointment, then was covered for the following one. Zero illegal about that.

[Anonymous]

Grandma would just add it as income in her 1040 and it would be minimal and she may feel generous and gift whatever back. Grandma may want to only want to give a gift less than the taxed amount of her extra income for that year.

[Anonymous]

Anonymous wrote:It wouldn't be illegal but it doesn't solve the problem of Grandma not wanting to file a return. Couldn't you help her with her return? E-File, Quickbooks, $50 or something.

Why isn't grandma filing a return.

[Anonymous]

Anonymous wrote:If your daycare allows you can actually make a larger payment to the facility, which would just give you a credit for the next month or two. I did this at my dentist office for the medical FSA. I had 2 appointments that had to be a week apart, and the first was in the end of Dec, the second first week of Jan, so I made the payment of whatever was left on the FSA at the first appointment, then was covered for the following one. Zero illegal about that.

For my dependent care fsa, you can only get reimbursed after service has been rendered, so you are not allowed to prepay and claim those expenses. Not sure if that's the law for all fsa plans or not.

[Anonymous]

Check the rules on dependent care FSA with your org. I can't remember the EXACT timeframe- but for childcare- you may be able to carry over through a month or two of the following year. I didn't realize this until end of year last year (after I had already planned the amounts to take out).