Dependent Care Assistance Program — DCAP
A Dependent Care Assistance Program is the formal name for an employer-funded benefit, including a Dependent Care FSA.
Official source: irs.gov
A Dependent Care Assistance Program is often called a DCAP. It is a special spending account for people who work. They can put money into this account from their paycheck before taxes. This money helps pay for care for children or adults who depend on them. This includes things like daycare, after-school programs, or care for an elderly parent or disabled adult dependent. Your employer sets up and manages the program.This program helps families pay for care for their loved ones. It can save you money because the money you put in the account is not taxed. This means you do not pay federal income tax or Social Security and Medicare taxes on that money. This makes the cost of care cheaper for you. Both parents must be working, looking for work, or going to school full-time to use this benefit.The money in a DCAP can be used for many kinds of care. For children, it covers day care, preschool, or a nanny. For adults, it can help pay for home care or adult day care. The person receiving care must live with you and be claimed as a dependent on your taxes. The care must be needed so you can work.Ask your employer if they offer a Dependent Care Assistance Program. If they do, they can tell you how to sign up and what care expenses are covered. See also: <a href="/glossary/dependent-care-fsa">Dependent Care FSA</a>.
In real life
- An employee used DCAP funds to cover after-school care for their child.
- Sarah enrolled her elderly mother in an adult day care program, paying for it with money from her company's DCAP.
- John's family used Dependent Care Assistance Program dollars to pay for summer camp so his kids had care while he worked.
Also known as
Take the next step
Frequently asked questions about Dependent Care Assistance Program
What is Dependent Care Assistance Program?+
A Dependent Care Assistance Program is the formal name for an employer-funded benefit, including a Dependent Care FSA, that helps pay for care for kids or adult dependents.
Who qualifies for Dependent Care Assistance Program?+
Low- to moderate-income families with children. Specific age, income, and work-status rules vary by program and state.
How do I apply for Dependent Care Assistance Program?+
Apply through your state human services agency. BK's Find Benefits tool links you to your state's portal. Official forms and instructions: https://www.irs.gov/publications/p503.
Where can I get help?+
Use BenefitKarma's free Benefit Eligibility Screener to see which family programs you qualify for, or contact your state human services agency for child care, TANF, and Head Start applications.
Source: irs.gov