KrisD15
Expert Alumni

Get your taxes done using TurboTax

The rules are the same for the dependent care credit and to claim the DCAP as non-taxable. 

"the IRS places restrictions on how the funds can be used. With a DCAP, the tax-free money must be used on eligible dependent care expenses for children under the age of 13 and dependent adults while you and/or your spouse are at work or going to school. Otherwise, the money will be considered taxable and will have to be included as earned income on your annual tax returns."

Talk with the account manager about how the funds may be used. 

 

Rules for DCAP accounts

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