MIT's Portable Child Care Subsidy (PCCS) program provides a benefit to eligible employees to address the high costs of childcare—an ongoing challenge for many employees and families.
For eligible employees who apply and are approved, MIT will fund Dependent Care Flexible Spending Accounts (DCFSA) with pre-tax contributions ranging from $3,000 to $5,000 per calendar year. The subsidy amount is based on family household income and number of eligible children. Taxable subsidy amounts may also be allocated, depending on the number of eligible children per household.
Carefully review the eligibility requirements and program details below. If you are eligible, you may apply for this subsidy during MIT's annual Open Enrollment period.
If you determine that you are not eligible for this subsidy due to household income requirements, you may still contribute to a Dependent Care Flexible Spending Account.
Eligibility Requirements
Employee eligibility
You are eligible to apply for the PCCS if you are an employee paid by MIT, appointed to work at MIT for at least three months, and work at least 50% of the normal full-time work schedule.
Note: Postdoctoral Fellows are not eligible for this program, but will be eligible for a portable child care benefit via a different process, through Postdoctoral Services and the Office of the Vice President for Research.
The following employment categories are not eligible for the PCCS program:
- union employees (if your employment with MIT is governed by a collective bargaining agreement, then the availability of these benefits and the extent of your participation in these plans will be governed by the terms of your collective bargaining agreement)
- individuals on long term disability
- employees working overseas (non-U.S. expats)
- contractor
- affiliate
- teaching or research assistant
- honorary lecturer
- summer appointment
- international visiting student
- member of the armed services assigned to MIT
- family member who is not employed by MIT
- work-study student
- employees on an unpaid leave of absence
Household eligibility
If you are married or have a domestic partner
If you are married, have a registered domestic partner, or share a household with the parent of your child(ren), they are considered your co-applicant for this subsidy and must be either working at least 20 hours per week, a full-time student, or disabled (per IRS definition). You will be asked to provide documentation to confirm employment, student, or disability status.
If you are divorced or legally separated
If you are divorced or legally separated, only the custodial parent is permitted to utilize the Dependent Care FSA (DCFSA) for the child(ren)'s day care expenses. If you, the MIT employee, are the custodial parent, you may apply for the PCCS.
The "custodial parent" is the parent with whom the child has lived for the greater number of nights during the past calendar year. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income.
NOTE: If your spouse or partner is able to work but is currently unemployed, you may apply for the subsidy at the next Open Enrollment window after they obtain employment.
Your child(ren)
Your child(ren) must be under 13 years of age when you apply for the subsidy and not turning 13 before the end of the current calendar year. You will be asked to provide birth certificates for any children you add during the application process.
Your child(ren) must be your legal dependent(s). This includes foster or adopted children.
Disabled dependent children over the age of 13: You may apply for the subsidy if you have a child age 13 or older and you can provide documentation from a medical doctor (at the time you apply for the subsidy) stating that your child has a disability-related special need requiring child care beyond the age of 13.
NOTE: If you apply and are approved for this benefit during Open Enrollment and your child turns 13 in the subsequent calendar year, you will only be able to receive reimbursement for expenses incurred prior to the date in which your child turns age 13.
Income eligibility
Your annual household taxable gross salary cannot exceed $160,000 (income of both you and your spouse/domestic partner, if applicable).
The PCCS web application will auto-populate your annual base MIT salary before taxes or deductions. You will be required to enter the annual base salary for your spouse/partner, if applicable. If your spouse/partner is paid hourly, please calculate their annual salary by multiplying their hourly base rate by their annual standard hours worked (e.g., $30 per hour x 2,080 hours per year, based on a standard 40-hour work week). If your spouse/partner is self-employed and is providing a Schedule C from their previous year's tax return, please report the gross income from the Schedule C, line 7, on your application.
If you have multiple children and your household income is between $160,000 and $200,000, please reference the chart below to determine the subsidy amount for which you may be eligible.
Documentation of eligibility
Your current MIT salary will auto-populate in the PCCS application and will be considered to verify your eligibility for the subsidy. If you have additional supplemental income, you must provide the amount and supporting documentation within the application.
You must provide birth certificates for any child(ren) you add to your application.
You must also provide income/eligibility documentation for your spouse or partner, if applicable.
- Employed spouse/partner: submit the two most recent pay stubs
- Self-employed spouse/partner: submit Form 1099 or Schedule C (gross income from line 7) from their most recent income tax return.
- Student spouse/partner: submit proof of full-time enrollment from the college or university and an expected graduation date.
- Legally disabled spouse/partner: submit proof of disability from your physician.
How the Subsidy Works
Tax-free subsidy
If you are eligible and approved, the PCCS tax-free benefit will be funded through your Dependent Care FSA (DCFSA) for the next calendar year, up to the $5,000 IRS limit. MIT DCFSAs are administered by HealthEquity. Eligible child care expenses will be reimbursed in accordance with the terms of the DCFSA.
Once you know the amount of your approved subsidy, you will be able to calculate whether you still want to contribute from your own salary to your DCFSA. The maximum annual DCFSA contribution amount of $5,000 includes both the PCCS funded by MIT and any additional contribution you choose to make.
Taxable subsidy
Any PCCS granted in excess of the $5,000 DCFSA maximum is considered taxable and will be held in a separate taxable child care subsidy plan. These plans are also 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.
More about how the subsidy works
For more details on this benefit, see the chart below for an illustration of the income eligibility tiers, as well as our specific examples and FAQs.
You can also watch this video which explains the subsidy and the eligibility requirements.
Important Reminders
- The combined maximum tax-free and taxable PCCS benefits will not exceed $10,000.
- Your DCFSA and the taxable child care subsidy amounts will be separate benefits in your online account with HealthEquity.
- The DCFSA subsidy and the taxable subsidy are use it or lose it benefits. You will have until April 30th of the following calendar year to submit for reimbursement for dependent care expenses incurred through the end of the calendar year. Any remaining subsidy benefits are forfeited.
- It is highly recommended that you use the pre-tax funds in your DCFSA first before accessing the amount in your taxable subsidy plan.
Portable Child Care Subsidy Calculation Chart
See how the PCCS is calculated based on a projection of your household income and the number of children in your household.
Tier 1: Household Income Under $100,000
| Subsidy Award: First Child Under 13 |
Additional Award: Second Child Under 13 |
Additional Award: Third Child Under 13 |
Additional Award: Fourth Child Under 13 |
Additional Awards |
|---|---|---|---|---|
| $5,000 tax-free in your DCFSA | $1,000 additional subsidy in your taxable child care plan (taxed only on the portion you use) | $1,000 additional subsidy in your taxable child care plan (taxed only on the portion you use) | $1,000 additional subsidy in your taxable child care plan (taxed only on the portion you use) | For each eligible child after the fourth, you will receive an additional taxable $1,000 until you reach the maximum award amount of $10,000 |
Maximum subsidy award: $10,000
Tier 2: Household Income From $100,000 – $129,999
| Subsidy Award: First Child Under 13 |
Additional Award: Second Child Under 13 |
Additional Award: Third Child Under 13 |
Additional Award: Fourth Child Under 13 |
Additional Awards |
|---|---|---|---|---|
| $4,000 tax-free in your DCFSA* | $1,000 tax-free in your DCFSA | $1,000 additional subsidy in your taxable child care plan (taxed only on the portion you use) | $1,000 additional subsidy in your taxable child care plan (taxed only on the portion you use) | For each eligible child after the fourth, you will receive an additional taxable $1,000 until you reach the maximum award amount of $10,000 |
Maximum subsidy award: $10,000
*You may contribute to your DCFSA, via payroll deduction, an additional amount up to the $5,000 DCFSA IRS maximum.
Tier 3: Household Income From $130,000 – $160,000
| Subsidy Award: First Child Under 13 |
Additional Award: Second Child Under 13 |
Additional Award: Third Child Under 13 |
Additional Award: Fourth Child Under 13 |
Additional Awards |
|---|---|---|---|---|
| $3,000 tax-free in your DCFSA* | $1,000 tax-free in your DCFSA* | $1,000 tax-free in your DCFSA | $1,000 additional subsidy in your taxable child care plan (taxed only on the portion you use) | For each eligible child after the fourth, you will receive an additional taxable $1,000 until you reach the maximum award amount of $10,000 |
Maximum subsidy award: $10,000
*You may contribute to your DCFSA, via payroll deduction, an additional amount up to the $5,000 DCFSA IRS maximum.
Tier 3: Adjustment for Household Income Over $160,000
For eligible employees whose household income is $160,001 - $200,000, your allowable income calculation to qualify for the Tier 3 subsidy is shown below.
| Subsidy Award: First Child Under 13 |
Additional Award: Second Child Under 13 |
Additional Award: Third Child Under 13 |
Additional Award: Fourth Child Under 13 |
Additional Award: Fifth Child Under 13 |
|---|---|---|---|---|
| Not eligible | Tier 3 allowable income cap increases to $170,000 | Tier 3 allowable income cap increases to $180,000 | Tier 3 allowable income cap increases to $190,000 | Tier 3 allowable income cap increases to $200,000 |
How to Apply
If you meet the employee, household, and income eligibility requirements described above, you may apply for this subsidy during MIT's annual Open Enrollment period. Subsidy amounts are granted each calendar year following open enrollment. You must reapply for each year you wish to receive a subsidy.
Once submitted, your application will be reviewed by MIT Benefits to confirm your eligibility.
Examples and FAQs
See specific examples and learn more details about this benefit.
If you still have questions after reviewing the information here and in the FAQs, contact MIT Benefits.
