Dependent Care (Day Care) Assistance Plan (DCAP)
The Dependent Care Assistance Plan (DCAP) account reimburses eligible child and/or adult daycare expenses during the plan year. Dependents must qualify under the Internal Revenue Code in order to be eligible.
DCAP is a program that allows an employee to set aside money, before taxes, from their paycheck to pay for childcare expenses (age twelve years and younger) of dependent children. In addition to childcare DCAP may also be used to pay for the dependent care expenses for any individual living with the participant that is physically or mentally unable to care for themselves and is eligible to be claimed as a dependent on an employee’s tax return.
The maximum annual amount that may be elected is $5,000 per year, or $416.66 per month. The monthly limit is modified for university employees paid over less than 12 months. The maximum amount is a household limit. The minimum amount for which an employee may enroll is $240 per year, or $20 per month.
DCAP is an alternative to the Dependent Care Tax Credit. Please note that if an employee claims the dependent care tax credit, the credit will be reduced, dollar for dollar, by the amount the employee contributes to DCAP. Please discuss which option is best with a tax advisor.
Expense Reimbursement
- DCAP participants must pay for qualifying dependent care expenses using personal funds and then request reimbursement from their DCAP account by submitting a completed DCAP Claim Form or by submitting a receipt that includes the dependent’s name, provider name, service period, payment amount, and the type of care being provided (i.e., nursery school, daycare, pre-school, before and after school care). Please refer to the Optum Financial Reference Guide for a listing of eligible and ineligible expenses or contact Optum Financial Customer Service at 888-469-3363. Please note that DCAP funds are available based on payroll deductions received.
Tip: Set up direct deposit on the Optum Financial personal portal to receive quicker reimbursements.
Termination/Retirement
- Employees who terminate employment or retire from the State will have their DCAP terminated on the last day of employment.
Unpaid Leave of Absence
- Employees who go off payroll due to a leave of absence from the State will have their DCAP terminated effective the last day of the pay period in which a deduction was taken.
- Upon returning to work and payroll, the employee may enroll or re-enroll in DCAP. The effective date will be the first day of the first full pay period following the member’s return to work date. No claims may be reimbursed for services rendered during the leave of absence period.
Flexible Spending Account (FSA-DCAP) Forms and Publications