Child Care Subsidy Grant Program

What is the Child Care Subsidy Grant Program?

Pepperdine understands that one of the most difficult work/life concerns for employees with children is the high cost of child care. The University created this Child Care Subsidy Grant Program to assist University faculty and staff in meeting the cost of child care.

Two grant programs are available to employees:

A mid-year grant is available to new hires, rehires, and transfers as well as employees who have recently gained an eligible dependent through birth, adoption, foster placement, legal guardianship, or court order. These employees have 30 days from their event date to apply for the Mid-year Child Care Subsidy Grant.
An annual grant is available to all eligible employees through an annual application and review process during the fall for funding in the next calendar year.

Who is eligible?

There are two steps that are used to determine eligibility for a grant.

1) Employee Eligibility

You are a full-time, benefits-eligible faculty or staff member, AND
Your spouse or registered domestic partner is employed or is a full-time student, OR

You are single, divorced, or widowed and have child(ren), age(s) twelve and under, whom you have custody and list as your legal dependent(s) on your tax return.

2) Child Eligibility

Your child is twelve years or younger for the entire 2025 calendar year,
Your child is or will be born, adopted, or legally placed within your care on or before December 31, 2024, AND
Your child qualifies as a 'dependent child' on your Federal tax return, you have custody of your child, and you are considered the legal guardian.

How much can I expect to receive from a grant?

One grant is allowed per household, and the amount of each grant is determined by several criteria including, but not limited to:

The applicant's gross household income,
The number and age(s) of the applicant's child(ren), and
The total number of applications and the total funds available each year.

MID-YEAR GRANT

Mid-year grants are awarded based on an application process and are funded by the University through a taxable Dependent Care Credit. The Program provides a grant of up to $5,000 a year, on a prorated basis, to eligible employees with dependent children ages twelve and under.

Possible Tax Implications

Mid-year grant funds are added to your taxable gross income, per paycheck, and the funds you receive will be represented in the amount of taxable wages on your W-2 from Pepperdine.

Who may apply for a mid-year grant?

The Mid-year Child Care Subsidy Grant is offered to employees who would otherwise be ineligible to receive grant funds through the annual application process. The following situations allow for employees to apply for a mid-year grant:

Employees who have been hired, rehired, or transferred into a benefits-eligible position may apply within 30 calendar days of their date of hire, date of rehire, or date of transfer.
Employees who have gained an eligible dependent through birth, adoption, foster placement, legal guardianship, or court order may apply within 30 calendar days of the event date.

If I am awarded a grant, how will I be notified?

Grant applications are reviewed as they are received. A determination e-mail will be sent to your campus e-mail address within two weeks of your submission, and funds will be applied to your pay as soon as administratively feasible for new hires/rehires and upon your return from leave for those experiencing an eligible life event.

How do I apply for the Mid-year Child Care Subsidy Grant?

If you wish to be considered for a Mid-year Child Care Subsidy Grant, you will need to complete this electronic application.

ANNUAL GRANT

Annual grants are awarded based on an annual application process and are funded by the University through its Dependent Care Flexible Spending Account on a pre-tax basis. The Program provides a grant of up to $5,000 a year to eligible employees with dependent children ages twelve and under. Program claims will be administered under the same rules and regulations governing Pepperdine's Flexible Spending Account (FSA). Grants are awarded annually each Fall. Employees hired after the annual application period has closed may apply for annual funding the following year.

Possible Tax Implications

You should consult your tax professional before accepting a grant award. If you are awarded a Child Care Subsidy Grant, there may be tax implications if:

You are married but file taxes separately.
You have custody of your child(ren), but your ex-spouse claims them on his/her taxes [or you alternate claiming the child(ren) on your taxes].
Your spouse has no earned income for the tax year, even if looking for work and receiving unemployment compensation.
You do not use the entire grant award for child care expenses.

The Internal Revenue Service (IRS) allows a maximum of $5,000 per household per year to be reimbursed through the Account. However, based on the applicant pool, the $5,000 maximum may not be granted to every qualified applicant. The grant amounts will vary year to year based on Program funding and the number of qualified applicants and eligible children.

NOTE: The IRS allows a $5,000 annual maximum, which can be applied to child care expenses whether the funds come from a Program grant, the employee's own pre-tax contribution to their account, or a combination of both. For example, if a Program amount of $2,500 is awarded, an employee may choose to contribute an additional $2,500 from his/her own wages into the account for a total of $5,000.

If I qualify for a grant, how do I use the grant?

During annual Open Enrollment, elect the Dependent Care Flexible Spending Account (DCFSA) for the following calendar year.
Upon enrollment in a DCFSA, the grant is credited to the account in even installments on a per pay-period basis throughout the plan year (e.g. if an applicant is awarded a $4,000 grant, then $333.33 per pay period will be deposited into the DCFSA for an exempt employee, or approximately $153.84 per pay period for a non-exempt employee).
Submit receipts from the eligible child care provider against available funds in the DCFSA. Eligible child care expenses will be reimbursed in accordance with the terms of the DCFSA up to the grant amount for that grant year.
Use it or lose it. Any unused balance in the Account at the close of the plan year will be forfeited and will return to the University. The Program grant is not transferable or portable.

If I am awarded a grant, how will I be notified?

A determination e-mail will be sent to your campus e-mail address approximately two weeks prior to Open Enrollment which begins October 28, 2024. If you receive an annual grant, you must enroll in the Dependent Care Flexible Spending Account during the Open Enrollment period to receive funding in 2025.

How do I apply for the Annual Child Care Subsidy Grant?

If you wish to be considered for an annual Child Care Subsidy Grant, you will need to complete the electronic 2025 application. Applications are accepted during the month of September each year.