Definitions

Qualified dependent: A qualified dependent(s) shall include children, in the custody of the ASE/GSR, who are age 12 or under on July 1st, i.e., claimed as a dependent on the ASE/GSR tax return.

Allowable receipts: If care is provided in a day-care center, the center must charge a fee. If the center cares for six or more dependents who are not residents, it must comply with all state and local licensing laws and applicable regulations. Expenses incurred before the beginning of or after the end of a term are not eligible for reimbursement. Child care provided by the spouse, a child of the ASE/GSR under age 19, or someone else the ASE/GSR claims as a dependent for tax purposes is not reimbursable.

Reimbursement Process

1. Normally, at the end of the quarter or semester, or when the maximum reimbursement amount has been reached during the term, the GSR downloads the GSR Childcare Reimbursement form and the ASE downloads the ASE Child Care Reimbursement Form UBEN 254.
2. The ASE/GSR completes the form, certifies that the appropriate program requirements are met and submits the form and applicable child care provider receipt(s) to the hiring unit’s personnel officer or other campus designated office.
3. Reimbursement requests must be submitted after the expenses are incurred. Reimbursement requests must be submitted via UBEN 254 form no later than the last day of the following term, (e.g. reimbursement for Fall quarter must be submitted by the end of Winter quarter). If the reimbursement is for Spring term, the request must be submitted before the first day of the Fall term.

Note: Two GSR/ASE employees may not each claim the credit for the same provider care for an eligible child unless the provider care exceeded the term dollar limit of $1,350 per quarter or $2,025 per semester. The second GSR/ASE employee may claim the additional expense reimbursement by submitting a separate claim.

Frequently Asked Questions

1) What is the reimbursement amount?

You can see the reimbursement amounts under Childcare section in the Agreement between the University of California and the UAW for the Academic Student Employee Unit (BX) and Agreement between the University of California and the UAW for the Graduate Student Researchers Unit (BR).

2) What is a “qualified dependent?”

A qualified dependent(s) shall include children, in the custody of the ASE/GSR, who are age 12 or under on July 1st, i.e., claimed as a dependent on the ASE/GSR tax return.

3) How is “childcare provider” defined?

The child care provider must be licensed with a valid tax ID or Social Security number. If the center cares for six or more dependents who are not residents, it must comply with all state and local licensing laws and applicable regulations. Child care provided by the spouse, a child of the ASE under 19, a friend or relative living in the same household as the Academic Student Employee or someone else the ASE claims as a dependent for tax purposes is not reimbursable.

4) How will the reimbursement be taxed?

The reimbursement will be subject to Federal tax withholding at 25% and State tax withholding at 6%. Defined Contribution Plan (DCP) and Medicare will be deducted if applicable. Reference: Federal Regulations 31.3403(g)-1.

5) How will I receive my reimbursement?

The reimbursement will be processed through Payroll and will be delivered in the same manner that an ASE/GSR usually receives payment, either direct deposit or a paper check. If the reimbursement is processed more than 30 days after a GSR no longer has an active appointment then the reimbursement will probably be by paper check.

6) Will the child care reimbursement affect my eligibility for financial aid?

It is possible that the child care reimbursement might impact eligibility for Financial Aid. It is the responsibility of the ASE/GSR to inform the appropriate agencies and offices of the receipt of such child care reimbursement.

7) Why is the child care reimbursement taxable?

The reimbursements received by eligible ASE/GSR employees under this program are treated by the IRS as additional wage income.

8) Can I claim the child care credit on my tax form?

Potentially yes. Even though the reimbursement received under the ASE/GSR Child Care Program represents taxable wages to the employees, the amounts paid by the ASE/GSR employees for child care services may be eligible for the ‘dependent care services’ tax credit set forth in Section 21 of the Internal Revenue Code. Unlike tax deductions that merely serve to reduce the amount of taxable income against which the tax percentage is applied, a tax credit is a dollar-for-dollar reduction in the taxpayer’s tax liability and is therefore significantly more valuable than a tax deduction.

The amount of the dependent care services tax credit that can be claimed is determined by multiplying the amount paid for the child care services during the year by a sliding scale percentage depending on the individual’s adjusted gross income as illustrated in the following chart:

Please note, however, that the amount of the credit cannot exceed $3,000 for one child or $6,000 for two or more children in any single tax year. The dependent care services tax credit is subject to a number of different requirements that are explained in IRS Publication 503, which can be found on the IRS website.

You should consult with your tax advisor in determining whether you are eligible to claim this credit.

9) I am a fellowship recipient, do I qualify for the Childcare Reimbursement Program?

No. The childcare reimbursement is only available for students holding at least 25% time employment as a GSR/ASE.