New Employee Guides Help Families Use Tax Breaks to Pay for Child Care

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The American Business Collaboration and Corporate Voices for Working Families announce the release of two new guides for employers and employees, promoting the use of Dependent Care Assistance Programs (DCAPs).

The American Business Collaboration and Corporate Voices for Working Families announce the release of two new guides for employers and employees promoting the use of Dependent Care Assistant Programs (DCAPs).

These new booklets are designed to help working families pay for the high cost of child and dependent care, as well as showcase best practices in the design and administration of these programs. The guides promote the use of Dependent Care Assistance Programs (DCAPs), which are flexible spending accounts that companies can provide to help employees pay for child or dependent care. DCAPs let employees set aside part of their salary each pay period to pay for the care they need for children or other dependents, in order for them to work. Employees do not pay federal, Social Security or Medicare taxes on the amount they put into their DCAPs.

The guides, one for employers and one for employees, were developed by the American Business Collaboration, a coalition of leading U.S. companies working to provide their employees access to quality dependent care programs and help them manage their work and personal responsibilities, and Corporate Voices for Working Families, a nonprofit corporate membership organization that aims to improve the lives of America’s working families.

“Despite the many benefits of DCAPs, we find that many employees who qualify for these programs don’t participate at all or don’t take full advantage of them because of their complexity and paperwork. These guides will help employers ‘de-mystify’ the process for employees by making these programs easier to understand and easier to use—which in turn, will help employees save money,” said Louise Stoney, Co-Founder of the Alliance on Early Childhood Finance, and an expert on tax policy and finance reform in early care and education.
Both the employer guide, Employee-Friendly Dependent Care Assistance Programs are a Win-Win, and the employee guide, Use This Important Tax Benefit to Save Money on Your Child and Dependent Care Expenses, can be downloaded at http://www.abcdependentcare.com.

Texas Instruments and the Providian Financial Corporation are two of the companies highlighted for their efforts in making their DCAP programs flexible and user-friendly. Texas Instruments has created an extensive communications strategy, including fact sheets, personal stories, fairs, and links to their online benefits website. Providian offers a Dependent Care Flexible Spending Account with a dollar-for-dollar company match of up to $2,000 to reimburse employees for eligible dependent care expenses.

The employee guide offers tips and suggestions for making participation in a plan as simple and foolproof as possible, including:

  • Determining your tax savings by using a DCAP
  • Eligibility guidelines for dependents and the care they use
  • Understanding other tax benefits available
  • How to avoid losing any of your DCAP contribution
  • Making the most of your DCAP

The American Business Collaboration and Corporate Voices released the guidebooks in conjunction with the annual meeting of Corporate Voices, being held in Washington, D.C. on September 8-9, 2008. The conference will also update participants on the legislative initiative undertaken by the American Business Collaboration and Corporate Voices to increase the cap on Dependent Care Assistance Programs from the current maximum of $5,000 a year—a figure that has been unchanged since 1986—to $7,500 a year. In today’s dollars, this tax benefit is worth only $2,800, while the average cost of care for an infant ranges from $4,000 to $14,000 a year.

About the American Business Collaboration: The American Business Collaboration is a groundbreaking collaboration of leading U.S. companies (Champions) partnering to ensure that their employees have access to quality dependent care programs and services to help them manage their work and personal responsibilities. Since 1992, ABC Champions have invested over $138 million in developing and enhancing child care, school-age, and elder care programs, making it the largest private sector investment of its kind. Current American Business Collaboration Champion companies are: Deloitte & Touche, Exxon Mobil Corporation, IBM Corporation, Johnson & Johnson, and Texas Instruments. The American Business Collaboration is managed by WFD Consulting, a work-life and talent management consulting firm.

About Corporate Voices for Working Families: Corporate Voices for Working Families is the leading national business membership organization representing the private and public sectors on public policy issues involving working families. A nonprofit, nonpartisan organization, Corporate Voices works to improve the lives of working families by developing policies that reflect collaboration among the private sector, government and other stakeholders. To create this bipartisan support, Corporate Voices facilitates research in several areas that spotlight the intersecting interests of business, community and families: workforce readiness, family economic stability, and flexibility in the workplace. Fifty partner companies, with collective annual net revenues of more than $1 trillion, employ more than 4 million individuals throughout all 50 states.

Media contact:

American Business Collaboration
Judith Presser
judith.presser(at)wfd.com
617-219-8722

Corporate Voices for Working Families
Tiffany Westover-Kernan
twestover-kernan(at)cvworkingfamilies.org
202-333-8921

This press release was distributed through eMediawire by Human Resources Marketer (HR Marketer: http://www.HRmarketer.com) on behalf of the company listed above.

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