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Employer Benefits
 Some employers provide additional support for working parents. Such benefits may include:
tax-free flexible spending accounts, referred to as the Dependent Care Assistance Plan, to help pay for child care costs, on-site child care centers, on-site child care resource and referral services, and vouchers to help pay for child care.Check with your employer's Human Resources office to see what may be available to you and your family. Dependent Care Assistance Plan
Program description: A Dependent Care Assistance Plan (DCAP) is a flexible spending account set up by an employer that allows an employee to pay for dependent care expenses with pre-tax dollars. The employer also receives tax benefits from such an account. An employee sets aside up to $5,000 of his/her salary in pre-tax dollars each month to pay for dependent care.Â
To apply: Contact your employer’s Human Resources office to see if your employer offers a Dependent Care Assistance Plan and how to apply.
Additional details: DCAP accounts interact with Social Security, State and Federal tax deductions. This means that parents may need to choose one option over another in order to receive the greatest savings. Generally, the DCAP will provide greater tax savings to those employees whose income exceeds $25,000. Employees with income below $25,000 will find greater tax savings through the federal child care tax credit. Employees can use both the dependent care account and the federal tax credit if dependent care expenses claimed total less than $4,800. The amount received from a DCAP reduces the available tax credit by the same amount. The employer must formally offer the DCAP. Dependent care expenses are only reimbursable if they are for dependent children up to age 13 or for disabled children who live with the employee. Dependent care expenses can only be reimbursed if they were incurred to allow both the employee and his/her spouse to work. Reimbursement is allowed for up to a maximum of $5,000 per year for child care expenses. Any funds remaining in the account are not returned to the employee.
Employer Resources:
Work & Family Connection
Work & Family Connection has been working to help employers create a workplace that is both supportive and effective, a workplace that ensures that your investment in employees pays off, a work environment with a dual agenda – one that meets business goals and also allows employees to meet their personal goals. WFC will help you educate yourselves, get the latest news about best practices, legislation, studies and company efforts.
For more information: See the National Child Care Information Center’s Employer Toolkit.
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