Dependent Care Assistance Program
Overview
The Dependent Care Assistance Program (DCAP) is an employee benefit plan – or a flexible spending plan – that helps employees pay for the care of a qualifying dependent. DCAP helps parents afford child care by offsetting the costs of going to work and providing for their families.
In July of 2025, the program was expanded to allow families to put more pre-tax earnings away to pay for child care. DCAP provides reimbursements for up to $7,500 annually ($3,750 each for married couples filing separately) to employees who pay for dependent care. Employees are then allowed to deduct these dependent care expenses from their paycheck on a pre-tax basis, which can include an employer contribution.
Top News and
Resources
Dependent Care Assistance Program (DCAP): Overview
Through flexible spending accounts, the DCAP exclusion gives parents flexibility to choose the type of care that best suits their needs — whether that’s a licensed child care center, home-based …
FFYF Capsule Collection: Tax Policy and Child Care
In A Nutshell With two-thirds of children ages five and under living in homes where all available parents are working, child care is not optional for most families – it’s …
A Year of Progress: 10 Bright Spots for Child Care & Early Learning
Even in a year marked by a government shutdown, political turbulence, and general unpredictability in Washington, 2025 gave us plenty to celebrate for child care and early learning. Families, advocates, …
POLLING: Rural Voters on Child Care and Head Start
In a new poll from First Five Years Fund, Rural Americans say money is tight, and child care is a significant part of that burden. The survey shows that the …
TOPLINES: Child Care in the 2025 Tax Reconciliation Package
The final version of the 2025 tax reconciliation package (also known as H.R.1) was signed into law on July 4th, 2025. The bill permanently improves three pieces of tax policy …
FFYF’s Sarah Rittling on Child Care Tax Enhancements in the Final Reconciliation Package
Final passage of the 2025 reconciliation bill contains updates to tax credits which will help make child care more affordable for more working families with young children including: The following …
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