In every region of the United States, average annual child care fees for an infant are higher than the average amount that families spend on food each year. In 49 states, child care fees for two children at any age exceed the median rent cost. In every state, average monthly fees for child care for one infant are higher than the average monthly car payment.

Employees can be reimbursed for qualifying dependent care expenses that meet certain requirements as described below.

1. The expenses must be incurred to enable you to be gainfully (earning income) employed. Gainful employment does not include unpaid volunteer work, or work for a nominal salary. The expense must be incurred for services rendered after the effective date of this election and during the plan year to which it applies.
    
2. The expenses must be for a qualifying individual. This includes a dependent of yours under age 13 when the care is provided; or a spouse or other dependent of yours who is physically or mentally incapable of self-care and for whom you can claim an exemption.
    
3. The services must be provided by an eligible provider of childcare. This includes a licensed daycare facility that complies with applicable state and local laws; and any individual who is not a tax dependent of yours, or a child of yours age 19 or older.
    
4. The expense must be for services incurred, not for services to be provided in the future.
    
5. The annual expense reimbursement may not exceed the lesser of:
   1. your earned income,
   2. if married, your spouse's earned income; or,
   3. $5,000 ($2,500 if married, filing separate income tax returns)
       
6. You must file Form 2441 annually with your individual tax return identifying all your dependent care providers.