Frequently Asked Questions: Dependent Care Benefits

What are the Internal Revenue Service (“IRS”) child and dependent care benefit limits?

The limit on the total amount of child and dependent care benefits you may receive tax-exempt is set by the IRS. The maximum amount for 2026 is $7,500 ($3,750 if married, filing separately). 

You receive a tax benefit because you are not paying taxes on the subsidy provided and/or money set aside to pay for dependent care expenses. The programs considered under these limits include the Back-Up Care, Child Care Benefit and Dependent Care Flexible Spending Account.

What are the child and dependent care benefits offered by Columbia University?

1. A Dependent Care Flexible Spending Account helps  pay for eligible dependent (child or adult day care) expenses, such as licensed day care centers and nursery schools, before school or after-school programs and home attendants.  You can be reimbursed for the cost of services provided for:

• Dependent children under the age of 13. You can submit claims only for expenses incurred up to the child’s 13th birthday. You may be eligible to dis-enroll from the Dependent Care FSA once your child reaches age 13 as part of a Change in Dependent Care Cost accessible through CUBES.
• Other dependents, including a parent, spouse or spouse’s child who is physically or mentally unable to care for himself or herself and who qualifies as a tax dependent.

2. Eligible employees can elect to receive a designated amount (termed “Child Care Benefit) from Columbia to a Dependent Care FSA during Open Enrollment or in the event of a Qualified Life Status change. If you elect this benefit mid-year, you will receive a prorated portion of the benefit.

You must meet all of the eligibility criteria below:

• Have a dependent child under the age of 6 and not yet attending kindergarten who:
  • Has been verified by the Columbia Benefits Service Center as an eligible dependent; and
  • Meets the IRS definition of a tax dependent

3. The Bright Horizons Back-Up Care program provides up to 200 hours per fiscal year (July 1 - June 30) to eligible employees for Back-Up Child Care, Back-Up Adult / Elder Care and any Tutoring Services** provided.

• Child care options
  • Center-based child care at a licensed Bright Horizons center or network center near your home or campus.
  • In-home care for children by qualified Bright Horizons professionals. This covers up to three children of the eligible Columbia affiliate.
  • Steve and Kate's Camps or other camps offered through the Bright Horizons network
  • Infant Transition Program to help families welcome a new baby into their home by providing an additional 50 hours of care that can be used until your child turns one.
• Adult / Elder care options: In-home care for adults by qualified Bright Horizons professionals
• Tutoring: is available through the Bright Horizons network using back-up care hours.

There is no cost to register for the Back-Up Care program. Columbia University covers most of the cost. Employees are responsible for the co-pays listed below: 

• Center-Based Child Care: $3 co-pay per hour per child
• In-Home Care for Children or Adults co-pay: $7 per hour
• There is a 4 hour minimum for care reservations.
• Eight hours of back-up care can be exchanged for 4 hours of virtual tutoring or 3 hours of in-person tutoring. Co-pay for tutoring is $3 per back-up care hour. So co-pay for 4 hours of tutoring is $24 (eight hours back-up x $3/hour = $24).

Please visit the Back-up Care website for additional program details.

How is the Tutoring program impacted?

Tutoring services are not considered tax-exempt dependent or child care benefits. All tutoring services provided through the Back-up Care program are considered taxable and Columbia will report and withhold taxes periodically on any amount of the service utilized in the calendar year.

What if I go beyond the IRS limit?

In order to comply with IRS regulations, if the determined benefit value of your University-provided Back-up Care program benefits, Child Care benefits, and annual Dependent Care Flexible Spending Account election exceeds $7,500 in 2026 within the calendar year, Columbia University will report and withhold taxes on the amount exceeding the limit*. The totals in excess of the limit* will be considered “imputable” for income, Medicare and Social Security taxes.

If your total Back-up Care, Child Care Benefits and Dependent Care Flexible Spending Account benefits exceed the limit*, the excess amount will be added to your earnings in a future paycheck, and taxes withheld. This may encompass several paychecks as there are other permissible deductions that may take priority. The amount will appear on your paycheck as “IBC – Imputed Back Up Care” and in Box 1, 3 & 5 of your Form W-2.

How will the benefit value be calculated?

The Back-Up Child Care program benefit value is the difference between the amount of your co-pay for the benefit received and the determined fair market value (“FMV”). The amount of your co-pay is deducted from the FMV since you already paid it. For example, if the total FMV of the back-up care you received is $20 per hour and your co-pay is $5 per hour, the benefit value you received is $15 per hour.

Example 1 - using the 2026 limit of $7,500

• Dependent Care FSA / Columbia Childcare Benefit: You have an annual election of $4,800 in your Dependent Care FSA / Columbia Childcare Benefit. Total value = $4,800
• Back-Up Care Utilization: You have also used 100 hours of Back-Up Care for one child during the calendar year period at a total benefit value of $4,000 (FMV x hours of care) - $1,000 co-pay (co-pay x hours of care) = $3,000. Total benefit value of back-up care utilization = $3,000

Your total benefit is the Dependent Care FSA election + Back-Up Care benefit utilization = $7,800. This exceeds the $7,500 IRS tax-exempt limit by $300, which would be subject to additional federal and state tax withholdings. This additional amount for which you are taxed is called “imputed income.” Learn more about taxable imputed income.

Example 2 - using the 2026 limit of $7,500

• Back-Up Care Utilization: You have used 200 hours of Back-Up Care for one child at a total value of $4,000 (FMV x hours of care) - $1,000 co-pay (co-pay x hours of care) = $3,000. Total benefit value of back-up care utilization = $3,000

Your total benefit is the Back-Up Care benefit utilization = $3,000. This does not exceed the $7,500 IRS tax-exempt limit. Therefore, back-up care received is tax-exempt.

_{Please note: The Fair Market Value amounts are provided by Bright Horizons and will change annually. Value amounts vary based on the type of care received as noted above. The values also vary slightly based on the region in which the care was provided. The chart above shows values for the Northeast region only.}

If I file my tax return with the status of “married filing separately” is my withholding or tax impacted?

The university reports taxable income and applies withholding taxes when the total value of dependent care benefits you receive exceeds the limit. This aligns with the threshold for persons who file their federal income tax returns as single or married. If you file your federal income tax return on a different basis, you may owe additional tax on your dependent care benefits. For example, for persons who file their federal tax returns as “married filing separately” the value of employer provided dependent care benefits is taxable once the amount exceeds $3,750 for 2026. The university’s reporting and withholding obligations are aligned with the limit threshold. You should consult your tax advisor as to your tax obligations with respect to the value of dependent care benefits you receive.

When completing IRS Tax Form 2441, Child and Dependent Care Expenses, I was asked to report dependent care benefits which is reported in Box 10 of Form W-2, but not to include amounts reported as wages in Box 1 of Form W-2. How do I know the amount of dependent care benefits that is reported as wages in Box 1?

You may either refer to Box 14 on your Form W-2 or your year-end paystub. The YTD amount for “Imputed Bright Horizons” would be the amount of current year Bright Horizon benefits reported as wages in Box 1 of Form W-2. If you use both Bright Horizon dependent care & Bright Horizon tutoring, a breakout between the two categories is needed.  For additional information please consult with your tax advisor or refer to IRS Publication 503, IRS Form 2441, and IRS Form 2441 Instructions for guidance pertaining to child and dependent care expenses.

My spouse/partner is employed by the university and we both receive dependent care benefits. Is my withholding or tax impacted?

The university reports taxable income and applies withholding taxes when the total value of dependent care benefits you receive exceeds the limit. The university’s reporting and withholding applies separately to each of you and your spouse/partner. Depending on your tax filing status and the total benefits you both receive, you may owe additional taxes. You should consult your tax advisor as to your tax obligations with respect to the value of dependent care benefits you receive.

Where do I go with questions?

• For questions about your Dependent Care Flexible Spending Account and Child Care Benefit elections, please contact the Columbia Benefits Service Center at 212-851-7000 or [email protected]
• To verify your Back-up Care usage, please access your Bright Horizons online account or contact Bright Horizons at 877-242-2737
• For tax-related inquiries, we recommend consulting a tax advisor. 

* IRS limits are subject to change

** Any tutoring service utilization is taxable and subject to additional tax withholdings.