Portable Child Care Subsidy Examples and FAQs

You may apply during MIT's annual Open Enrollment period in order to receive the subsidy for the following calendar year. If you are hired mid-year, you will need to wait until the next Open Enrollment period to apply.

The combined maximum PCCS amount (both tax-free and taxable benefits) is $10,000.

Since the PCCS application considers household income to apply and be awarded a subsidy, only one of you may apply for the subsidy.

If your PCCS application is approved during the annual Open Enrollment period, a DCFSA and taxable Child Care Subsidy Account (if applicable) will be automatically set up by HealthEquity on your behalf.

Tax-free subsidy: The subsidy will be divided into 24 or 52 equal payments and deposited into your DCFSA each pay period during the calendar year (January 1 –December 31). You must submit receipts for eligible child care expenses to receive reimbursement after the money is deposited into the account. We recommend that employees use their tax-free subsidy first.

Each recipient must understand and abide by all rules and regulations that govern MIT’s Dependent Care Flexible Spending Account (DCFSA).

Taxable subsidy: Any subsidy in excess of the $5,000 DCFSA maximum is considered taxable, and will be available in a separate taxable Child Care Subsidy Account administered by HealthEquity. Eligible child care expenses follow the same rules as the DCFSA. You must request an expense reimbursement directly through HealthEquity and, if the expense is approved, you will be reimbursed through MIT payroll and taxed accordingly. HealthEquity will notify MIT Payroll on the 1st of each month with the prior month's approved child care expenses. You will be reimbursed in the next applicable pay period following Payroll's receipt of that information.

If you receive a subsidy from MIT, you can elect to make an additional contribution to your DCFSA from your salary on a pre-tax basis, as long as the total of the tax-free subsidy plus your contribution does not exceed the annual maximum total of $5,000 per family ($2,500, if you're married and file taxes separately).

The MIT subsidy and employee contributions from your paycheck are use-it-or-lose-it tax-free benefits under the IRS DCFSA rules. Therefore, it is highly recommended that you use the funds in your DCFSA first before requesting reimbursement from the taxable Child Care Subsidy Account (if applicable). 

Visit HealthEquity for a list of eligible and ineligible expenses.

The IRS prohibits the carryover of unused balances from one year to the next in the tax-free DCFSA, whether MIT funded or from employee contributions. Likewise, any unused balance in the taxable Child Care Subsidy Account cannot be rolled over to the following calendar year.

Employees on an unpaid leave of absence are not eligible for the PCCS.

If a subsidy recipient goes on an unpaid leave of absence during the plan year, any subsidy payments (and the employee's own contributions) to the DCFSA will automatically stop during that time. IRS guidelines state that any dependent care expenses incurred during a paid or an unpaid leave are not eligible for reimbursement. 

Once you transition to long term disability, you will no longer be eligible for the subsidy. You can submit for expenses incurred prior to the change in status.

No, MIT is not able to transfer the subsidy. Your spouse will be able to apply for the PCCS program during the next annual Open Enrollment period.

The PCCS and your contributions (if applicable) to the DCFSA will stop the date your employment ends. You may only be reimbursed for eligible expenses incurred prior to your termination date.