Dependent Care Assistance Program

Dependent Care Assistance Programs (DCAP) let employees set aside part of their salary pre-tax each pay period to pay for eligible expenses incurred for the care of a young child, disabled spouse, elderly parent, or other dependent who is physically or mentally incapable of self-care, so that someone may work or actively look for work. Currently eligible expenses include day care facility fees, local day camp fees, and baby-sitting fees for at-home care for qualified dependents while the employee and spouse are working.

The amount families can set aside each year is currently limited to $5,000. This cap was put in place in 1986, and has never been adjusted for inflation. In 2007 - not accounting for rising child care costs - the cap buys $2,800 worth of child care in 1986 dollars.

Corporate Voices and the American Business Collaboration (ABC) have partnered to develop and execute a legislative campaign to increase the DCAP pre-tax cap - first to $7,500, and then incrementally in line with inflation. Corporate Voices is working with ABC and a local government relations firm to research and write legislation and amend the tax code. For more information about how your company might join this initiative please contact Judi Presser at 617-219-8722 or judith.presser@wfd.com.