You are probably enrolled in a dependent day care plan by your company, and for whatever reason you need to cancel it. Here are some of the things you can do to facilitate the cancellation:
- Check your employee handbook or any memo relating to the dependent day care benefit and see if there is any provision regarding cancellations. It is actually your obligation to notify your company of this, as it will affect the rates and charges you pay for this service.
- Prepare proper documentation before you make the changes. If you are canceling this because your child has already reached the age limit, you may need to show a certified birth certificate, for example. Also prepare any other documentation you think may be useful to facilitate faster cancellation. Have everything in one file so that you can easily verify this in case there are any discrepancies. It's these discrepancies that usually cause the delay in your request for cancellation.
- Draft your letter stating your intent. Writing it down will make it official and everything will be put on record. Besides, your company's Human Resources department will need this for their file, too.
- Inform your HR representative of your intent. This way he will be able to assist you and handle your requests. He should also be able to answer questions you may have on how to go about with claims.
- Before you make the changes be sure that the flexible spending account you have has already been closed and no outstanding payments and claims are made. Should there be any, in spite of the cancellation, you cannot claim anymore make a claim for this.
- If you know there is still some remaining money in your day care account, or you have made contributions that you cannot anymore make use of since you are making a cancellation, you can make a claim for this. Send the proper receipts for any previous payments made to your HR, for faster processing.
- You can confirm the cancellation when you get your next pay envelope and see that your income has already reflected the amount that should have been made for dependent day care deposits.
As per IRS regulations, you should know that you can't cancel your dependent day care account for reasons such as inability to pay for it, or using the money for different purposes. This can only be cancelled or changed for the following situations:
- Marriage or divorce
- The death of your spouse or your dependent
- When you take an unpaid leave of absence for a longer period.
- When your eligible child has reached the age of 13 years old.
- When there is a change in your spouse's job hours (like from part-time to full time)
Cancellation is applicable on the last day of the month when the termination was made. So, if you submitted your request and were approved in February 13, for example, cancellation will take effect at the end of this month.