Dependent Care Assistance Plan

Course: Retirement Planning
Lesson 9: Building Retirement Wealth by Maximizing Fringe Benefits

Student Question:

Is a Dependent Care Assistance Plan (DCAP) funded by an Flexible Spending Account the same thing as a Dependent Care FSA?  If not, could you provide some additional info as to how the two would work together (could an individual utilize both $5,000 exclusions)?  Is there more to know here?

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Instructor Response:

A DCAP may be structured as an FSA or access to a brick-and-mortar facility.  One must generally choose one of the two.  The maximum economic value available to an employee from a DCAP, whether structured as an FSA or brick and mortar facility access, cannot exceed $5,000. 

Please let us know if you have any other questions!