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FSA childcare with nanny from care.com?

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  • FSA childcare with nanny from care.com?

    We just had our first baby and will be returning to work in early 2017. We just found a great nanny off of care.com. We will be paying her via check on a weekly/monthly basis depending upon how many hours we use her for.

    I'm just curious, am I able to use the flexible spending account for childcare for something like this? I know we could if we used a formal daycare but I wasn't sure if that was the case when we hire a "private" nanny. And if it is possible, how do I do this if I'm paying the nanny via check. Is there a best way to reimburse myself? I'm just unfamiliar with this whole area but know there are potential for big savings and would appreciate some guidance.
    Thanks!

  • #2
    We found our nanny off of care.com 2 years ago, and have been reimbursed the $5K we put in annually through our employer's FSA/dependent care spending account.  However, we use myhomepay.com for her payroll management and tax filing.  It costs extra, but I honestly don't have the time to deal with the complexity of payroll payments, appropriate tax withholding, prepare and file federal/state tax returns, paystubs, etc.  I know that a lot of people pay their nannies "under the table", but our concern was that our nanny is pretty young, and this is her full time job - if she were to leave and list us as her employer for the last couple of years at a new job, they could request tax returns and therefore find out that she (and us) weren't paying taxes on her earnings.

    I always just print off the paystubs and submit them along with the FSA reimbursement form at the end of the year, and they send us a check.  Not sure what type of documentation you may need to get reimbursement if you're paying her with checks (maybe copies of cashed/deposited checks?).

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