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.
The program provides reimbursements for up to $2,500 annually ($5,000 for married couples) 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.
DCAP helps parents afford child care by offseting the costs of going to work and providing for their families. It is critical that Congress expand this tax provision to support businesses and parents.
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The tax code