WHAT IS AN DCAP FSA
Sometimes referred to as a Cafeteria Plan, Flex Plan, or Section 125 Plan— a Flexible Spending Account allows you to set aside a
certain amount of your earnings into an account before paying income taxes. If you are one of many people who spend money on outof-
pocket daycare expenses, an FSA can make these expenses more affordable. During the year you have access to this account for
reimbursement of these expenses you regularly pay out of pocket. When you use tax-free dollars to pay for these expenses, you realize
an increase in your spending power and substantial tax savings.
DEPENDENT CARE FSA
A “DCAP” is a dependent care assistance program that is also an FSA. An employee
can use a DCAP to be reimbursed for employment-related expenses
that allow the employee and his or her spouse to be “gainfully employed.”
Common DCAP expenses are those incurred to have a babysitter or day-care
provider take care of employee's children (only under the age of 13) while the
employee and spouse are both working, or to take care of a spouse or other
tax dependent who lives with the employee and is incapable of self-care.
Please Note: Contributions must be made to the DCAP account prior to reimbursement.
Contribution Limits: The annual election is the smallest of the following
amounts (all limits based on the employee’s taxable year):
$5000 for married individuals filing jointly or for unmarried individuals .
$2500 for married individuals filing separately.
USE-IT OR LOSE-IT
If you do not use all the dollars contributed to the reimbursement account by the end of the plan
year, remaining funds will be forfeit- ed to the plan.
