What is a DCAP and how does it work?
A Dependent Care Assistance Program (DCAP) allows you to pay for these expenses while reaping an important tax break. Sometimes known as a “Dependent Care FSA,” these funds can be used to pay for certain care expenses for qualifying dependents—children, a disabled spouse, or legally dependent parents.
For many people, the cost of day care, nursery school, or supervision for an aging parent is a significant monthly expense. A DCAP additionally serves as an alternative to the Dependent Care Tax Credit.
DID YOU KNOW…?
DCAP funds cover summer or holiday day camps, and child care at a day camp, nursery school, or by a private sitter.
So your family is taken care of while you are busy working hard.
Why open a DCAP?
- A Dependent Care Assistance Program allows you to set aside pre-tax money for eligible dependent care expenses
- Every dollar you set aside in your account reduces how much you pay in income taxes
Use it for child and elder day care while you work, like before- and after-school care expenses, summer day camp, nursery school, and pre-school