Is DCAP Worth it?
Of the parents surveyed in a Care.com Care Report, 67% are spending 20% OR MORE of their annual household income on childcare. No matter the qualifying expense, it can be a significant expense.
BASE® is here to help lessen the burden. So many know about being able to pay for their eligible health care expenses on a pre-tax basis with the Flexible Spending Account (FSA), but there is another tax-advantaged account that can help save money on childcare.
Dependent Care Assistance Plan (DCAP) is an employee benefit that helps employees pay for the care of their qualifying dependent(s) so that the employee can work, look for work, or attend school full time.
The BASE® DCAP is a pre-tax benefit that provides some additional financial assistance to allow employees to take care of their family. Employees can contribute up to the annual maximum limit, $5,000, to pay for their qualified DCAP expenses.
Childcare is one of the biggest expenses for most parents, and bottom line, if your employees are paying for daycare, the BASE® DCAP is already worth it. The DCAP can help…
- Employees save $240 in federal taxes for every $1,000 spent on dependent care with DCAP.
- Employees facing the increased daycare costs because according to a Zippia.com, 72% of families say that childcare is more expensive now compared to before the pandemic.
- Any employee that has dependents that live with them that go to daycare.
The Dependent Care Assistance Plan (DCAP) helps employees have peace of mind knowing that they are establishing funds to help pay for the costs of dependent care and increase their take-home pay due to funds being transferred on a pre-tax basis. The DCAP provides employers with an enhanced benefits package that will help to recruit new and retain current employees.
To learn more about the BASE® Dependent Care Assistance Plan (DCAP) available, contact BASE® at 888.386.9680 or visit www.BASEonline.com.
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