This is a powerful benefit that can really mean a lot to those employees with the added expense of child care. For those of us who have to pay to have their child well-cared for while they work, the DCAP reimbursement accounts can be a considerable savings. DCAPs allow for pre-tax treatment for daycare, baby sitting, or in-home elder care expenses.

The IRS permits employees to defer up to $5000 of their salaries into the Dependent Daycare Plan. For married couples filing jointly, $5000 is still the total maximum for both parents combined. Dependent Daycare means that the daycare is necessary so that the employee can work. That means that if the employee is married, both spouses need to be gainfully employed. Dependent Daycare means fulltime daycare up through and including the level prior to kindergarten. For kindergarten up through and including age 12, it means before and after care, school’s out days, early release days, winter break, spring break and summer day camp.

If you had 5 employees using the daycare account, the employer FICA savings would be somewhere between $1300 and $1900 per year.

Private Insurance Premium Reimbursement
Another reimbursement plan with no employer-risk can be great for employees who have insurance coverages for their family that are not offered as part of a group plan. Ask us how we can help make this plan work for you!