Dependent Care Is A Rising Expense
Child care is currently one of the top three expenses in the family budget after food and housing,1 and nobody feels the impact of those costs more than working families, many of whom spend 10 percent or more of their income on care.2 Considering the rise in child care costs, it’s no wonder that Dependent Care Flexible Spending Accounts (FSAs) have grown in popularity in recent years.
Employers Can Help Offset the Cost of Dependent Care
By offering a Dependent Care FSA, also known as a Dependent Care Assistance Program (DCAP), employers can help employees save money on work-related dependent care expenses that they accrue every day.
Unlike the dependent care tax credit, which requires employees to claim their dependent care expenses when they file taxes for the previous year, a Dependent Care FSA allows employees to set aside a portion of their paycheck, before taxes are taken out, to put toward day care costs. There are many child care-related costs that are eligible (some of which may surprise you!), and this benefit can also be used toward custodial care for older adults as well.
Inside this eBook
In this illustrative, easy-to-read eBook, we’ll share all the important information brokers, employers, and benefits specialists should consider if they’re thinking about offering Dependent Care Assistance to their employees, including:
Could you be enhancing your benefit plan with this tax-advantaged offering? Download the eBook to find out if this benefit is right for your employee base.
- “The U.S. and the High Cost of Child Care: A Review of Prices and Proposed Solutions for a Broken System. 2018 Report.” Child Care Aware of America.
- “Care.com 2019 Cost of Care Survey.” Care.com.