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© Hitesman & Wold, P.A. 2019 Cafeteria Plan Summary Description (3-11) 27 However, if that person does not claim the child as a qualifying child (as defined in Section 152 of the Internal Revenue Code) for any purpose (i.e., a dependent care expense reimbursement program, the Earned Income credit, the dependency deduction, the child tax credit, and the dependent care credit), then the child is the Qualifying Individual of the other person (i.e., the person with the lowest adjusted gross income). This is the one person that is entitled to treat the child as a Qualifying Individual for purposes of the Dependent Care FSA. Important: If you enroll for dependent care benefits, it will be assumed that you are the one person entitled to treat the child as a Qualifying Individual for purposes of reimbursement under the Dependent Care FSA. 4.7 What is an "Eligible Expense"? (a) General Rule—Covered. An "Eligible Expense" generally means expenses for the care of a Qualifying Individual incurred by you (or your spouse) to enable you (and your spouse) to be gainfully employed. Eligible Expenses generally include: (1) day care expenses; (2) the cost of nursery school, preschool, or similar programs below the level of kindergarten; (3) the cost of after-school care (including care for Qualifying Individuals in kindergarten and beyond); (4) the cost of day camp, including specialty day camp (but not overnight camp); (5) the cost of transportation provided by a care provider; (6) the cost of meals incidental to and inseparable from care; (7) employment taxes paid on behalf of a care provider; (8) the cost of room and board provided to a care provider (e.g., a live in nanny); (9) certain indirect expenses, such as application and agency fees, if they must be paid to obtain the care and care is actually provided; and (10) placement or “hold the spot” fees provided that they must be paid to obtain the care (not Eligible Expenses unless and until care is actually provided by the provider to whom such fees are paid). (b) General Rule—Not Covered. Expenses incurred that do not enable you to be gainfully employed are generally not “eligible” including, but not limited to, expenses incurred while on vacation, sick leave, or any other type of situation where you (and your spouse) are not at work or actively looking for work (i.e., gainfully employed). Your spouse, if any, is deemed to be gainfully employed if he/she is: (1) a full time student, or (2) mentally or physically incapable of self-care and resides with you for more than one-half of the calendar year. (c) Daily Allocation. Usually, expenses must be allocated on a daily basis so that expenses incurred on a day you (or your spouse) were not at work may not be reimbursed.