A Dependent Care Assistance Plan (DCAP), also known as a Dependent Care Flexible Spending Account, is a very useful benefit for working parents and those who are caring for other dependents. With a DCAP, you elect up to $5,000 annually (before taxes) to spend on care for dependent children under age 13 or dependents over 13 and over who cannot care for themselves – such as elderly parents or those with disabilities – while you’re at work or attending school.
A DCAP account is a use-it-or-lose it benefit. If you don’t spend your tax-free dollars before the end of the year, you can’t keep them or roll them over. As such, here are some ways to make sure you make the most out of your DCAP benefits.
Here are some ways to maximize your DCAP benefits
Submit a Recurring Expense Form
If your child attends daycare or uses before and after school care on a regular basis, you may be able to file a recurring expense claim.
With a recurring expense claim, you can eliminate the need to file for reimbursement every month or pay period. If your administrator offers this, you can fill out the form once, get the approved signatures, and then your reimbursements are automatically delivered.
Again, each administrator is different, so contact your TPA for more information.
Keep in mind, if you only use intermittent care, you’re probably better off submitting expense claims separately.
Not Just for During the School Year
Does your child attend day camps during the summer or over spring break? Well, those are eligible expenses.
Every parent knows, camps can be costly. Using your DCAP can help ease that burden.
A DCAP can be used for day camps only. Overnight camps do not qualify.
Sick Child Care
It happens – children get sick. For many parents, working from home is not an option and staying home with a sick child can eat up valuable time off.
If you can find an approved caregiver, you can use your DCAP benefits for sick child care.
You cannot use your DCAP to pay for:
- Babysitting for reasons other than 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 Kindergarten and above grades
Child care is expensive, and while a DCAP benefit account is great tool to use while you work, there are some expenses that are not approved.
Pets are an important part of many people’s lives. While you may be inclined to have a pet walker or use a boarding service, your “fur babies” do not count as qualified dependents.
Filing for Reimbursement
There are a few pieces of information and documentation you need in order 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 cannot be used.
Your benefits administrator will let you know how to submit the reimbursement form (email, online, fax, mobile app).
DataPath Administrative Services provides third party benefits administration services to businesses and State agencies for FSAs, HRAs, HSAs, COBRA, and more.