DCAP

N/A for municipal enrollees Pre-Tax Dependent Care Assistance Program (DCAP)

The Dependent Care Assistance Program (DCAP), administered by SHPS, allows employees to pay for certain dependent care expenses with before-tax dollars. Participating in DCAP can significantly reduce your federal and state income taxes. Through DCAP, participants may pay on a pre-tax basis for qualified dependent care expenses, such as child and elder care, after school programs, and day camp. Download the list of eligible expenses for additional details.

The program allows a participant to contribute up to $5,000 per family annually on a pre-tax basis as a payroll deduction. For taxpayers in a 28% income tax bracket, a $5,000 contribution to the DCAP would save an estimated $1,400 in taxes. As you incur expenses, submit a claim form and receipt to SHPS; they will deposit the reimbursement to your bank.

DCAP Enrollment

New Employees
New employees may enroll for partial year benefits. For DCAP, coverage begins on the first date of employment.

Open Enrollment and Enrollment During The Year

The DCAP and HCSA plan year is January through December. Open enrollment for these programs will take place in fall 2008 for 2009 calendar year benefits. You must re-enroll each year. Employees that have a “qualified” family status change during the plan year, as outlined on the enrollment and change form, may also enroll.

The monthly administrative fee for HCSA alone, DCAP alone, or HCSA and DCAP combined is $3.75 on a pre-tax basis.

It is important to estimate your expenses carefully, as the Internal Revenue Service requires that any unused funds in a participant's account at plan year-end be forfeited.

Dependent Care Assistance Program (DCAP)
SHPS	1-866-862-2422

Eligibility

Active state employees who work half-time or more and have employment-related expenses for a dependent child under the age of 13 and/or a disabled adult dependent are eligible for DCAP.

What is DCAP?
The Dependent Care Assistance Program (DCAP) is a benefit that allows active employees to deposit money into an account on a pre-tax basis to use for dependent care or elder care expenses. Each January, you can elect up to $5,000 per year to pay for these expenses. Each pay period, a proportionate amount is taken out of the participant's paycheck before taxes are calculated. As you incur the expenses, submit your receipts for reimbursement through direct deposit to your bank.

Under Section 21 of the Internal Revenue Code, taxpayers can receive a tax credit for work-related expenses incurred for the care of a dependent child under the age of 13 and/or a disabled adult dependent while the taxpayer and spouse are working or gainfully seeking employment. You may contribute up to $5,000 per year per family or the lower paid spouse's income, whichever is lower. For additional details, download the 2008 DCAP & HCSA Handbook.

Why is DCAP Beneficial?
Because it can save you money. Every dollar that you deposit to the DCAP Plan is done on a pre-tax basis. The amount you elect will be deducted from your "gross" wages. This means that DCAP contributions are deducted before federal income taxes.

When can one enroll in DCAP?
While most GIC benefits are tied to the fiscal year, DCAP benefits are on a calendar-year basis. Therefore, enrollees must enroll in in the fall for the following year calendar year benefits. You may also enroll in DCAP if any of the following occurs: