According to a recent 2022 Care.com survey, 59% of parents are concerned about childcare costs with parents claiming 20% of their household income is paid to their provider.
But BASE® is here to help. 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.
As many working parents know, dependent care is expensive. No matter the qualifying expense, whether its daycare, before or after school care, day camps, elder care, or care for a disabled spouse or dependent, it can be a significant expense.
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.
The primary benefits of the DCAP for employees are peace of mind knowing they are establishing funds to help pay for their cost of dependent care and an increase in take-home pay due to funds being transferred on a pre-tax basis, therefore lowering taxable wages. For employers, they have an enhanced benefits package that helps to recruit and retain employees and employees increase take-home pay by setting aside dollars pre-tax to pay for dependent care.
For more information on the BASE® Dependent Care Assistance Plan (DCAP), contact BASE® at 888.386.9680 or visit www.BASEonline.com.