Small Business Taxes & Accounting: Part II (Dependent Care Benefits)
I received a question from a client the other day and before I answered her I realized it would make a great blog post! (Thanks, dear.) "So now that Hunky is a real employee of his business, we're exploring the benefits he is going to offer himself (and his employees). I'm working on health insurance which I realize will change in January. What about offering childcare benefits? From the DOL website it looks like it's an arrangement between employer and employee. How would we go about arranging this? Would we pay a babysitter then provide documentation to Best.Dentist.Ever. which then reimburses us? Or could the business hire a part-time babysitter/nanny and pay her a paycheck? However, if she's an employee of the business, would our homeowners insurance cover her if she were injured on the job?" I think your best option for childcare benefits would be to set up what's called a Dependent Care Assistance Program (DCAP) within a Flexible Spending Arran