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QUALIFIED MEDICAL CHILD SUPPORT ORDERS In certain circumstances, you may be able to enroll a child of a participant in the Plan in the medical expense reimbursement portion of the Plan by filing a"Qualified Medical Child Support Order" ("QMCSO") with the Employer. A QMCSO may only be filed with respect to a child of a Participant in the Plan. If you are interested in more information relating to QMCSO and the procedures for filing them with the Plan, please contact the Finance Department. You may obtain, without charge, a copy of the procedures from the Plan Administrator. HOW BENEFITS ARE TAXED Subject to applicable nondiscrimination requirements discussed above, the Employer believes that contributions used to pay for benefits other than the dependent care benefits will not be subject to federal or state income taxes or to social security taxes. These contributions and benefit payments will not be reduced by income tax or social security withholding. Dependent care benefits you receive from your dependent care reimbursement account during a calendar year generally will not be taxable unless they exceed the lower of (a) $5,000 ($2,500 if you are married but file a separate return for the year), reduced by the amount of any dependent care credit you claim for other expenses (see SPECIAL NOTICE CONCERNING DEPENDENT CARE EXPENSES below) or (b) your income limitation for that year. If the amount of dependent care benefits exceeds your income limitation, the excess will be taxable. If you are single, your income limitation for a year is your earned income for that year. If you are married, your income limitation is the lower of (a) your earned income for the year, or (b) your spouse's earned income for the year. If your spouse is a full-time student or is physically or mentally incapable of caring for himself or herself during the year, your spouse will be considered to have earned income of $250 per month if you have one Dependent who qualifies for coverage or $500 per month if you have two or more Dependents who qualify for coverage. However, to sustain the nontaxable status of dependent care benefits you receive from the Plan, you will be required to report the amount of those reimbursements and the name, address, and the social security number or employer identification number of the dependent care provider on your federal income tax return. By each January 31, as part of your W-2, the Employer will provide you with a statement showing the amount of dependent care reimbursement paid to you during the preceding calendar year so that you can calculate the amount, if any, that was taxable. This statement may be a part of your W-2. The Employer will not withhold income taxes or social security taxes from dependent care benefit payments. To illustrate the tax savings offered by the Plan, suppose Terry expects to be paid a gross salary of $24,000 during the year. If Terry has 2 children and expects to have $1,000 in medical expenses that will not be covered by insurance or any other health plan and $1,680 of premiums for Employer-sponsored health insurance ($140 per month), Terry may pay these expenses on an 16