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
Resources
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 …
Dependent Care Assistance Program (DCAP): Overview
Millions of American families are struggling to find quality, reliable, affordable child care they can depend on. This is having a devastating impact on our youngest learners, working families, and …
TOPLINES: Child Care in the 2025 Tax Reconciliation Package
The final version of the 2025 tax reconciliation package (also known as the One Big Beautiful Bill Act – H.R.1) was signed into law on July 4th, 2025. The bill …
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Two Bipartisan Bills to Address Quality, Affordability of Child Care introduced in Congress
Last week, Iowa’s Congressional leaders introduced two bipartisan bills, the ACCESS Act and the Improving Child Care for Working Families Act, to address the quality and affordability of child care. …
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 …
What You Can Do
about DCAP
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