Graduate Student Childcare, Reimbursement Programs
Participation in Campus Childcare Programs
Graduate students may participate if eligible in campus child care programs, if any, including subsidies and other financial assistance. Information regarding available campus child care programs can be found at the UCSC Childcare website.
Students employed with eligible ASE or GSR appointments are entitled to participate in the UC Dependent Care Reimbursement Flexible Spending Account Program (DEPCare).
DEPCare allows eligible Graduate Student Employees to pay for qualifying dependent care expenses on a pre-tax, salary reduction basis. The amount the employee specifies when they enroll in the program is taken from their paycheck each month and deposited in their DEPCare account. The employee pays their dependent care expenses as usual, and then submits a claim form and receipts to CONEXIS, the company UC has hired to administer this program. CONEXIS sends the employee a reimbursement payment, either by direct deposit to their bank account or by check.
Students employed in an eligible ASE or GSR title code with at least a 43.75% appointment may enroll in this program.
Qualifying dependents include
- a child under age 13 in your custody whom you can claim as a dependent on your tax return;
- a spouse who is physically or mentally incapable of self-care
- a dependent who lives with you such as a child age 13 or older, parent, sibling, or in-law any of whom is physically or mentally incapable of self-care, and whom you claim as a dependent on your tax return.
ASEs and GSRs can access additional information about DEPCare at the UCnet web site.
Any questions regarding DEPCare should be directed to the campus Benefits Office at 831-459-2013.
Graduate student employees participating in the Child Care Reimbursement program may not request reimbursement for the same expenses from DEPCare. ASEs and GSRs participating in the Child care Reimbursement program will be required to certify on their reimbursement form that their expenses are not being claimed under any other program.
Each eligible ASE or GSR may be reimbursed up to $900 per quarter under this program for qualified child care expenses incurred during the appointment period in any quarter of the year, including summer.
Qualified dependent: A qualified dependent is a child in the custody of the ASE or GSR who is twelve years old or younger as of July 1st for the following fiscal year (includes the current summer session and the new academic year). A child is in the custody of the ASE or GSR when they can be claimed as a dependent on the appointee’s tax return.
Eligible ASE: A registered graduate or undergraduate student with at least a 25% appointment as an Academic Student Employee represented by the United Auto Workers who has (a) qualified dependent(s).
Eligible GSR: A registered graduate student with at least a 25% GSR appointment who has a qualified dependent.
Note: A student with both a 25% ASE and 25% GSR appointment is eligible for only one maximum reimbursement of $900.
Allowable receipts: Receipts from a child care provider with a valid tax ID or Employee Identification Number (EIN) incurred during an eligible ASE or GSR appointment. Expenses incurred before the beginning of or after the end of an ASE or GSR appointment are not eligible for reimbursement.
Child care provider: A licensed child care provider with a valid tax ID. If care is provided in a day-care center, the center must charge a fee. If the center cares for six or more dependents who are not residents, it must comply with all state and local licensing laws and applicable regulations. Child care provided by the spouse, a child of the graduate student employee under the age of 19, a friend or relative living in the same household as the graduate student employee, or someone else the employee claims as a dependent for tax purposes is not reimbursable.
ASE or GSR Employee
At the end of the quarter or summer period, or when the maximum reimbursement expense amount has been incurred, download either the ASE Child Care Reimbursement Form (UBEN 254 form) or the GSR Child Care Reimbursement form.
Complete the appropriate form, certifying that the program requirements are met and submit the form with applicable child care provider receipt(s) to the Graduate Division.
Reimbursement requests must be submitted no later than the last day of the quarter following the quarter in which the relevant expenses were incurred (e.g., reimbursement for fall quarter must be submitted by the end of winter quarter). If the reimbursement is for spring quarter, the request must be submitted before the first day of the fall quarter. Reimbursement requests submitted later than these deadlines cannot be processed.
Note: Two graduate student employees may not each claim the credit for the same provider care for an eligible child unless the provider care exceeded the term dollar limit of $900 per quarter. The second employee may claim the additional expense reimbursement. For example, if the reimbursable amount totals $1200 for the term, the first graduate student employee may claim $900 and the second employee may claim $300.
A graduate student employee who is eligible for the Dependent Care program cannot submit receipts for the same expenses to both the Dependent Care and the Child Care Reimbursement programs.
Once the Graduate Division has certified that the form is complete and all the eligibility requirements have been met, the form and receipts will be sent to the appropriate Divisional payroll office for processing as a one-time payment. Payment will normally be in the same form as the student’s regular pay (i.e., check or electronic deposit).
Q. WHAT IS A “QUALIFIED DEPENDENT”?
A. A qualified dependent is a child in the custody of the ASE or GSR who is age twelve or under on July 1.
Example 1: Child turns 13 on July 2nd; Child is eligible for the following academic year ending in June.
Example 2: Child turns 13 on June 30th; Child is not eligible for the following academic year since child was not 12 or under on July 1.
A child is in the custody of the ASE or GSR when they can be claimed as a dependent on the appointee’s tax return.
Q. HOW IS “CHILD CARE PROVIDER” DEFINED?
A. The child care provider must have a valid tax ID or Social Security number. If care is provided in a day-care center, the center must charge a fee. If the center cares for six or more dependents who are not residents, it must comply with all state and local licensing laws and applicable regulations. Child care provided by the spouse, a child of the graduate student employee under the age of 19, a friend or relative living in the same household as the graduate student employee or someone else the employee claims as a dependent for tax purposes is not reimbursable.
Q. ARE SUMMER CAMPS OR OTHER SUMMER ENRICHMENT PROGRAMS APPLICABLE CHILD CARE PROGRAMS?
A. If the summer program meets the criteria noted previously, then the program will be treated as an applicable child care program. It is the ASE’s responsibility to produce applicable documentation for reimbursement.
Q. HOW WILL THE REIMBURSEMENT BE TAXED?
A. Because it is processed as a “one-time payment” the reimbursement will be subject to Federal tax withholding at 25% and State tax withholding at 6%. Additionally, Defined Contribution Plan (DCP) and Medicare deductions will be taken, if applicable.
Q. HOW WILL I RECEIVE MY REIMBURSEMENT?
A. Payment will normally be in the same form as the student’s regular pay (i.e., check or electronic deposit).
Q. WILL THE $5,000 DEPCARE LIMIT BE REDUCED BY AMOUNTS PAID UNDER THE CHILD CARE REIMBURSEMENT PROGRAM?
A. No. Because the reimbursements paid to graduate student employees under the Child Care Program are treated as additional wages, such reimbursements will not reduce the maximum pre-tax amount that can be deducted from the employee’s paycheck under the DepCare Program.
Q. WILL THE CHILD CARE REIMBURSEMENT AFFECT MY ELIGIBILITY FOR FINANCIAL AID?
A. It is possible that the child care reimbursement might impact eligibility for Financial Aid. It is the responsibility of the Graduate Student Employee to inform the appropriate agencies and offices of the receipt of such child care reimbursement.
Q. WHY IS THE CHILD CARE REIMBURSEMENT TAXABLE?
A. In order for the child care reimbursement payment made by an employer to be non-taxable, it must be paid pursuant to a ‘dependent care assistance program’ that meets certain requirements set forth in the Internal Revenue Code. The DepCare Program meets these requirements, which is why reimbursements made under DepCare are not taxable to the employee. The Child Care Reimbursement Program, however, is not structured to meet dependent care assistance program requirements; therefore, the IRS treats the reimbursements received by eligible employees under this program as additional wage income.
Q. CAN I CLAIM THE CHILD CARE CREDIT ON MY TAX FORM?
A. Potentially yes. Even though the reimbursement received under the ASE Child Care Program represents taxable wages to the employees, the amounts paid by the ASE employees for child care services may be eligible for the ‘dependent care services’ tax credit set forth in Section 21 of the Internal Revenue Code. For further information please see IRS Publication 503.
You should consult with your tax advisor in determining whether you are eligible to claim this credit.