dependent care assistance program (DCAP)
Definition
An employer sponsored program that provides reimbursements for up to $2,500 annually ($5,000 for married couples), to employees who pay for dependent care if certain conditions are met. Employees are allowed to deduct dependent care expenses from their paycheck on a pre-tax basis. Employees who use DCAP are not eligible to claim the Child and Dependent Care Credit on their tax return.
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