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Dependent Care Assistance Plan (DCAP) – Eligibility, Expenses, and More!

Dependent Care Assistance Plan (DCAP)

Hey, parents! Let’s talk about Dependent Care Flexible Spending Accounts, also known as a Dependent Care Assistance Plan (DCAP). I’ll cover contribution limits, dependent requirements, eligible expenses, and more!

What is a Dependent Care Assistance Plan (DCAP)?

A DCAP is an employer-sponsored benefit that allows workers to set aside money before taxes to pay for dependent care while they are working or attending school.

Who can use a DCAP?

If your employer offers this benefit, it’s available to working adults with:

  • Dependents younger than 13 years old
  • Adult dependents who need assistance or elderly care during working hours

How much can I put in my DCAP?

Here are the current contribution limits:

If you file with a married filing jointly or head of household status on your tax returns, you can set aside up to $10,500 per year.

Those who file their tax returns using a married filing separately status can contribute up to $5,250 per year.

How can I use my DCAP?

Eligible expenses for DCAP accounts include:

  • Day care, preschool, and pre-kindergarten tuition
  • Before- and after-school care (may be called ‘extended day’ by your child’s institution)
  • Summer day camps
  • Child care costs during work and/or college hours
  • Sick-child care
  • Adult and elderly care programs

NOT Eligible

A DCAP is designed to help people pay for the costs of keeping your dependents cared for while you’re working or at school. However, this is limited to tuition and similar type expenses.

You CAN NOT use your DCAP to pay for:

  • Babysitting not necessitated by working or attending college
  • Field trips
  • Lunches or other food items
  • Overnight camps (where the child does not come home at the end of the day)
  • Care provided by your spouse, your child under age 19, a parent of the qualifying child who is not your spouse, or another person who counts as your tax dependent
  • School supplies, uniforms or clothing
  • Tuition for grades kindergarten and above

Filing for Reimbursement

There are a few pieces of information you’ll have to submit to get reimbursed from your DCAP:

  • Request for Reimbursement (claim form)
  • Dependent’s name and date of birth
  • Itemization of charges (receipt)
  • Start and end dates of service
  • Caregiver’s name, address, tax ID number (or Social Security number)

Credit card receipts, canceled checks, and balance-forward statements are not acceptable documentation.

Talk to your benefits administrator about how to submit the reimbursement form (email, online, fax, mobile app).

If your child is enrolled in a program with predictable tuition, some benefits administrators offer what is known as a recurring expense form. Your caregiver must verify your tuition total for the period being claimed. Once you submit this form, you should receive reimbursement each pay day (divided up equally) until the end of the claimed recurring service period or until you’ve received your annual election total, whichever comes first.

Use It or Lose It!

A DCAP is a use-it-or-lose-it account, and you cannot change your election once the plan year starts (with a few exceptions, such as no longer having an eligible child care expense or a change in the number of your dependents). If you do not claim the entire amount, you cannot get this money back. Be sure to use this year’s receipts to calculate how much you need to put aside for child care for the following year.

See IRS Publication 503 for more information.