Question of the month: Can we double dip on our DCAP?

Dear Gina – 

My spouse and I both have employers who offer the Dependent Care Assistance Plan (DCAP) through a Flexible Spending Account.  Our childcare expenses are way more than the $5,000 limit for each of our plans.  Can we both elect $5,000 to cover our huge daycare expenses?

Great question, but unfortunately the answer is no. The $5,000 DCAP limit is per household and not per person (the Health FSA allows it but the DCAP does not). The IRS would consider it double-dipping if both of you claimed $5,000. Similarly, if you claimed $5,000 for the DCAP plan and then claimed the Dependent Care Credit on your tax return it would also be considered double-dipping by the IRS. Your W-2 should have your DCAP amount for the calendar year listed in Box 10 so a tax preparer, or your tax software, knows to not accidentally give you the Dependent Care Credit.

– Gina



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