Dependent Care Advantage Account

The Dependent Care Advantage Account (DCAA) helps you pay for childcare, elder care, or care for a disabled dependent—using pre-tax dollars. That means you can save money on expenses you’re already paying for, like daycare, preschool, and afterschool programs. You can contribute up to $7,500 per household (or $3,750 if single, or married, filing separately).

Please Note: If you mistakenly enroll in DCAA, you cannot remove DCAA election and then be enrolled into the HCSA.

Unlike the Health Care Spending Account (HCSA), the DCAA is not pre-funded. You can only use the money as it’s added from each paycheck. For example: Elect $2,400 for the year? You will have $100 to spend after your first pay period.

To use the DCAA, you must be paying for dependent care so that you and your spouse (if you are married) can work or go to school. If your spouse is not disabled, not at work, or not in school, it is assumed they are available to care for the dependent.

Dependent care must be for a qualifying individual—like a child under the age of 13 or a dependent of any age who is disabled and lives with you at least eight hours a day. You can choose in-home care or care at a facility, but it cannot be provided by someone you also claim as a dependent.

The Dependent Care Advantage Account (DCAA). is open to New York State employees of Executive Branch state agencies, the State University of New York, the Legislature, and the Unified Court System.
•All negotiating units in the Unified Court System are eligible to participate.
•Employees of the Roswell Park Comprehensive Cancer Center, NYS Energy Research and Development Authority (NYSERDA), New York Liquidation Bureau, and Environmental Facilities Corporation (EFC) are also eligible to participate.

Who Is Not Eligible to Enroll?
Employees paid on a fee basis are not eligible to participate in the DCAA.

DCAA Regulations
The care provided to your dependent must be so, you (and your spouse if you’re married) can work or look for work. “Work” may include actively looking for a job. It doesn’t include unpaid volunteer work or volunteer work for a nominal salary. Your spouse is considered to have worked if they are a full-time student for at least five calendar months during the tax year or if they are incapable of self-care.

Double-dipping
Expenses reimbursed under your DCAA can’t also be reimbursed under your spouse’s Dependent Care FSA and vice versa. You can’t use the same account for the same expenses.

Special Rule for Divorced Parents
While an eligible child of divorced parents is treated as a dependent of both parents for an HCSA, only the custodial parent of divorced or legally separated parents can be reimbursed using the DCAA.

Tax Reporting Requirements
When participating in the DCAA, you must identify all persons or organizations that provide care for your child or dependent. You do this by filing IRS Form 2441—Child and Dependent Care Expenses, along with your federal return. Please consult your tax preparer, tax attorney, or accountant if you have questions regarding your specific tax situation.

As a result of collective bargaining agreements between the State and the public employee unions, many employees are eligible for an employer contribution from New York State to help you pay for dependent care expenses. In order to receive this contribution, you need to enroll in the DCAA employer contribution.
If you’re eligible, the State will automatically deposit funds into your account. You can enroll for just the employer contribution or add your own pre-tax dollars—up to the annual IRS household limit. Just remember to include the employer contribution in your total DCAA
election amount.

Who’s Eligible?
The following employees are currently eligible for the employer contribution:
•Employees of Executive Branch state agencies, Roswell Park Comprehensive Cancer Center, or State University of New York who are designated Management Confidential (M/C) or represented by Civil Service Employees Association (CSEA), Public Employees Federation (PEF), United University Professions (UUP), NYS Correctional Officers and Police Benevolent Association (NYSCOPBA), Council-82, District Council 37 (DC-37), Police Benevolent Association of New York State, Inc. (PBANYS), or Graduate Student Employees Union (GSEU)
•The Unified Court System (except Negotiating Unit #88)
•The Legislature, NYSERDA, or EFC

If you’re eligible, it’s a simple way to stretch your budget—don’t leave money on the table!

Here’s what else you should know:
•The employer contribution is not taxed, just like your own DCAA contributions—so it increases your savings without increasing your taxable income.
•You don’t have to contribute your own funds to receive the employer contribution—but you can add your own funds up to the IRS limit.
•It’s use-it-or-lose-it—so make sure to plan and use the full amount by the end of the plan year.
•If both you and your spouse are State employees and each eligible, you can both receive the employer contribution in separate DCAA accounts. Just be sure you don’t go over the IRS limit!
•There is no employer contribution for the HCSA—only the DCAA.

To use the DCAA, you must be paying for dependent care so that you and your spouse (if you are married) can work or go to school. If your spouse is not disabled, not at work, or not in school, it is assumed they are available to care for the dependent.

Eligible Dependent Care Expenses

• Fees for licensed day care or adult care facilities
• Before and after school care programs for dependents under age 13
• Amounts paid for services provided in or outside your home, including babysitters or nursery school
• Nanny expenses attributed to dependent care
• Nursery school (preschool) fees
• Summer day camp-primary purpose must be custodial care and not educations in nature
• Late pick-up fees

Eligible Disability Expenses

• Automobile equipment and installation costs for a disabled person in excess of the cost of an ordinary automobile
• Device for lifting a mobility impaired person into an automobile
• Braille books/magazines in excess of cost of regular editions
• Note-taker for hearing impaired child in school
• Seeing eye dog (buying, training, and maintaining)
• Special devices, such as a tape recorder or typewriter for a visually impaired person
• Visual alert system in the home or other items such as a special phone required for a hearing-impaired person
• Wheelchair or autoette (cost of operating/maintaining) 

Sample Ineligible Expenses

• Expenses related to a dependent’s medical care
• Money paid to your spouse, your child under 19, a parent of your child who is not your spouse, or a person for whom you or your spouse is entitled to a personal tax exemption as a dependent
• Expenses related to care for a disabled spouse or tax dependent living outside your home
• Educational expenses (such as summer school and tutoring programs)
• Food expenses (unless it cannot be separated from care)
• Incidental expenses such as extra charges for supplies, special events or activities, unless it cannot be separated from care
• Overnight camp
• Tuition for kindergarten and later grades

Qualifying Life Event (QLE)
In general, you must enroll during the open enrollment period if you would like to contribute to an FSA. Once you are enrolled in the FSA, your election amount is locked in, and your pre-tax deductions will continue throughout the plan year. However, if you experience an eligible QLE during the plan year, you may be permitted to enroll or adjust your contribution amount, if consistent with the event. QLE elections must be submitted within 60 calendar days of the event, but as soon as possible to prevent unwanted, non-refundable deductions.

Please Note: QLE elections will be accepted during the plan year from January 2–October 31, 2026, for events that occur on or before October 31, 2026. QLE applications submitted after October 31, 2026, cannot be processed in time for the last deduction of the year.

Your period of coverage will begin on the date of your qualifying event or the date your QLE election is received, whichever is later. You will be able to submit claims for eligible expenses incurred on or after that date through March 15, 2027.

Please see the QLE chart on page 11 of the Enrollment Book for examples of QLEs.

To Submit a QLE or New Hire Application:
1. Login to your Bentek account
2. From Employee Home, click on Life Events
3. Click on (+) Life Events, then select the applicable event from the drop down and follow instructions to submit your event

What Happens After a QLE Election?
No need to upload extra documentation—just be sure to keep legal records for your own files in case of an IRS audit. You can disregard this message in Bentek. Following approval of your QLE, payroll changes and any updated deductions will be applied in the first pay period per your agency’s payroll schedule. If your QLE does not occur for any reason, log in to your online account to change or cancel your QLE.

Leave Without Pay or Termination
If you retire, leave state employment, go on leave without pay, or otherwise stop contributing to your account, your deductions will stop.

Your coverage will continue and eligible expenses that are received from your initial eligibility date through March 15, 2027, will be reimbursed.

 If you have a question about your situation, contact the FSA administrator at 800-358-7202.

Leave With Pay
Payroll deductions will continue for participants on sick leave, sick leave at half-pay, and vacation provided there are sufficient funds in the paycheck. Deductions will not continue for employees receiving short- or long-term disability benefits through the Income Protection Plan (IPP). Some situations may be considered eligible qualifying events.

Returning to Payroll

If you return to the payroll and have missed a deduction, you may re-enroll to restart your deductions by submitting a QLE election within 60 calendar days of your return to work.

What To Do at Tax Time
When you receive your W-2, your total DCAA contributions and employer contribution will be reflected in Box 10. You will need to file IRS Form 2441 when you file your Federal Income Tax Return.

Heads-up: You can’t double-dip on tax breaks. If you use a Dependent Care FSA, you can’t also claim those same expenses for the Dependent Care Tax Credit. In some cases, the tax credit may save you more—talk to your tax advisor to decide what works best.

Please consult your tax preparer, tax attorney, or accountant if you have questions regarding your specific tax situation.

Extended Coverage Options

Pre-Pay: This option is only available to you during Open Enrollment. You can contribute your full annual election before you leave the payroll, which will allow you to use your account for expenses incurred after you leave. During open enrollment, make sure to indicate the number of paychecks you expect to receive prior to your official termination from the NYS payroll.

Continuation of Coverage: You continue to contribute to the HCSA after you leave the payroll by making after-tax payments directly to the FSA administrator; you will be able to submit claims for services that occur after you leave NYS. The FSA administrator will send you a notice to elect continuation of coverage that you must sign and return by the specified deadline.

Who determines whether a child or other dependent is disabled?
The IRS offers guidelines for you as the participant to consult in order to determine if your dependent is disabled.

Can I pay for my disabled child’s overnight expenses, since they are at the school during the day?
No. This account is only for daycare while you work—not for residential care, tuition for special educational schools, or medical care.

Do my child’s summer camp expenses qualify if occasional sleepovers are a part of any overall day program?
Summer day camps that offer occasional overnights are eligible. Sleepaway camps do not qualify, and your child must be under age 13.

My elderly parent requires care. I pay someone to take care of them in their own home while I work. Is this an eligible expense?
No. The IRS requires that the person needing care reside in your home at least eight hours a day.

How can payroll deductions to the DCAA be a benefit if I still have to pay for my dependent care expenses with my own money?
The money you contribute to your DCAA is not subject to state, federal, social security, and city (if applicable) taxes, so you end up paying less in taxes. This allows you to take home more of your paycheck and be reimbursed from your DCAA with pre-tax or whole dollars.

Can I pay my parent to care for my child?
Yes, as long as your parent is not your dependent and will give you their social security number (SSN). You need their SSN so that you can report them as the caregiver when you file claims for reimbursement and when you file your income tax return. Your parent should report the payments as income.

Can I pay my spouse?
No. You can’t pay your spouse to care for your children. You also cannot pay your own child under age 19, or any other person you claim as a dependent.

Can I use the DCAA to pay a maid, cook, or housekeeper?
If the intent of the service is to provide your dependent with care while you work, then those expenses are eligible.

What about kindergarten tuition?
Tuition costs for kindergarten and up are not eligible.

Can I participate in the DCAA if I use an au pair to care for my children?
Yes, the amounts paid to cover wages, taxes on those wages, expenses incurred for lodging, food the au pair consumes in your home, and agency fees are eligible for reimbursement.

What if my babysitter won’t give me their SSN?
In order to receive reimbursement, you must provide the FSA administrator with your caregiver’s SSN. Therefore, it is important that you discuss this program with your caregiver before electing to participate.

My 20-year-old child is disabled and lives in my home. We pay a neighbor to care for them while we work. Is this cost reimbursable?
Yes. If your disabled dependent is unable to care for themselves and your spouse also works, then the costs of caring for them in your home or at a special daycare facility are reimbursable. The same rules apply if your spouse is disabled.

I have a disabled friend who resides with me and for whom I contribute a sizable portion of financial support. Can I establish a DCAA for their care while I’m at work?
Yes, if the individual meets the IRS definition of a qualifying individual.

If I am able to enroll in the DCAA with an eligible change in status during the year, how far back may I calculate my expenses?
You should not back date your expenses. If you enroll during the plan year your expenses will be eligible from the date your change in status application is received, or the date of your change event, whichever is later.

What if my child turns age 13 during the middle of the plan year?
IRS regulations state that once a child turns 13, child care expenses are no longer eligible, unless the child is disabled. “Dependent reaches age 13” is a change in status event that will allow you to terminate or decrease the amount you contribute to your account.

My child was expelled from daycare and is now being cared for by a family member, free of charge. Can I terminate my DCAA?
Yes, “change in care provider” is an eligible change in status event.

What if I’m laid off, fired, or quit my job?
If you leave state service during a plan year, you retain your account through the end of that plan year. This means that although you cannot make any additional contributions to your account, you have until December 31 of the plan year to incur eligible expenses—and until March 31 of the following year to submit a claim.

What if my spouse is laid off, fired, or quits his or her job?
If your spouse is working or looking for work, then you are still eligible to participate, or you may use that event as a change in status to make a change to your account.

My spouse and I have separated but are not yet “legally” separated. Is that a “change in status?”
No. Other circumstances surrounding a separation may qualify, such as a change in employment schedule.

If I become legally separated, how does this affect participation in the plan?
A participant who is legally separated is not considered married for purposes of the DCAA and may be reimbursed up to $7,500 of eligible expenses—even if filing a separate tax return. Legal separation would constitute a change in status.

Can my spouse and I both use the $7,500 limit?
No, the $7.500 limit is a household limit.

My spouse is a full-time student. Can we participate in the DCAA?
Yes. However, the maximum you can contribute to the DCAA is determined by the earned income of you and your spouse. As a student, the IRS considers your spouse to be gainfully employed. Earned income is calculated as not less than $250 for one qualifying dependent and $500 for more than one qualifying dependent for each month the spouse is a student.

How do I know if the Federal Tax Credit or the DCAA is better for me?
We encourage you to use the online calculator to help you choose. As the taxpayer, you must determine whether participation in the DCAA, claiming a federal and state tax credit or exclusion, or using a combination of the taxable and tax-free benefits is best for you. Consult your tax advisor or the IRS for additional information.

Can I take the Federal Tax Credit and be in the DCAA, too?
You cannot use the Federal Tax Credit and the DCAA for the same expenses. However, if you underestimate your DCAA contribution, the tax credit can be used for any remaining expenses up to the maximum allowed by the tax credit provisions.

The amount reimbursed through your DCAA reduces dollar-for-dollar the amount that can be used to calculate the Federal Tax Credit. Use the online tax calculator to find out how to maximize
your savings.

Will my dependent care deductions be reported to the IRS?
Yes. Your deductions will be reflected on your W-2 form in Box 10. You must file IRS Form 2441 with your tax return. Remember that IRS Form 2441 requires you to provide a taxpayer identification number or SSN for each dependent care provider.

My spouse and I are divorced. My spouse claims the children as dependents for tax purposes, but we share equal custody. Am I able to enroll in the DCAA?
Yes, if you meet the IRS definition of a custodial parent. The custodial parent is the parent with whom the child lived for the greater number of nights. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. For details and an exception for a parent who works at night, see IRS Pub. 501.

According to the IRS, the noncustodial parent can’t treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child
of divorced or separated parents.

How is the amount of the employer contribution determined? What if I’m working at 50%?
It is based on your annualized state salary.

My spouse and I are both state employees and are represented by an eligible bargaining unit. Can we both enroll in the DCAA and get the employer contribution?
Yes. Apply for enrollment individually, and you will both receive the employer contribution based on your individual state salaries. Remember, your combined enrollments cannot exceed the $7,500 maximum calendar year household limit set by the IRS.

What is the minimum amount I can enroll for?
There is no minimum. However, you can enroll just for the amount of the employer contribution and your DCAA will be fully funded by New York State. You will have no biweekly DCAA deductions taken from your paycheck.