Vanguard's Dependent Day Care Subsidy Program may provide a subsidy to help you pay for dependent day care for children or other dependents, subject to eligibility requirements.
To participate, you must:
- Have a combined annual household income of less than:
- $75,900 for 2018.
- $77,400 for 2019.
- Establish a dependent day care flexible spending account (FSA).
Vanguard will offset dependent day care FSA contributions by 30%, up to an annual maximum of $1,500, for eligible individuals.
Dependent day care FSAs allow you to pay for eligible dependent day care expenses on a pre-tax basis. The Vanguard subsidy reduces the amount you contribute to a dependent day care FSA. You can establish a dependent day care FSA only during Open Enrollment or within 30 days of experiencing a qualified life event or change in family status.
Note: The amount of the subsidy will be included on the Form W-2 as gross taxable income. IRS rules that apply to dependent day care FSAs also apply to the Dependent Day Care Subsidy Program.
Example of how the subsidy works
Crew member Jane Smith expects to spend $3,000 annually for day care expenses.
At enrollment, she pledges 70% of $3,000, or $2,100, to the dependent day care subsidy FSA. Therefore, Jane’s biweekly contribution is $80.77.
Vanguard contributes 30% of $3,000, or $900. Vanguard’s biweekly subsidy is $34.62.
The total annual FSA amounts to $3,000, depositing $115.39 biweekly to the dependent care FSA subsidy account.
|Jane's pledge||Vanguard's subsidy||Total|
|$2,100 pledge (70%)||$900 (30%, up to annual maximum of $1,500)||$3,000 annually|
|$80.77 biweekly contribution||$34.62 biweekly subsidy contribution||$115.39 biweekly FSA deposit|