Every Dollar Matters

DCAP (Dependent Care Assistance Plan)

First, are you spending money on child care or care for one or more dependents? Does your work offer a DCAP (Dependent Care Assistance Plan) deduction? You need to sign up!

Who qualifies for dependent care

Contribution limits

Lets say you are spending $5000 a year in child care expenses and you are paying 15% of your income in federal tax withholding. Signing up for this plan will save you $750.00 a year in tax savings. So often people forget that they can save money by signing up for these type of plans.

One important point to make with the DCAP deductions...it is a "use the money or lose the money" deduction. This means that if you elect to have $5000 deducted from your paycheck for DCAP you need to spend the entire $5000 on dependent care expenses! If your dependent expenses come to only $4000 it is going to still cost you the $5000 you elected.

For more scoop on this deduction ask your Human Resources rep.