How dependent care assistance can help you

The Dependent Care Assistance Program (DCAP) can help you reduce taxable income by setting aside money from each paycheck — before taxes — to pay for dependent care expenses. This benefit is only offered to PEBB benefits-eligible state and higher-education employees. The maximum annual amount is $5,000 per household ($2,500 each if you and your spouse file separate tax returns).

Here are some ways DCAP can help you:

  • Setting aside a portion of your pay in DCAP reduces your annual taxable income and helps you pay for out-of-pocket dependent care expenses.
  • DCAP reimburses qualified dependent care expenses so you and your spouse (if married) can attend school or work, or look for work. If you have a stay-at-home spouse, you cannot enroll in the DCAP.
  • Eligible expenses include babysitting, daycare, prekindergarten, and registration fees (see our eligible expenses list).

Qualifying dependents include:

  • A dependent under age 13 who qualifies as an Internal Revenue Service (IRS) dependent.
  • A spouse who is physically or mentally incapable of self-care.
  • Any other IRS-recognized dependent who is physically and/or mentally incapable of self-care.