The Office of the State Comptroller announced the temporary increase in the annual amount that participants in the Dependent Care Account Plan (DCAP) can exclude from income to cover eligible dependent care expenses during 2021.
The American Rescue Plan Act of 2021 allows employers to amend their dependent care assistance programs to allow employees to contribute up to $10,500 for the tax year (or $5,250 for individuals married and filing separately). The Comptroller has elected to make this change.
Mid-Year Election Changes Permitted
The DCAP is governed by the Internal Revenue Code (IRC) and U.S. Department of the Treasury regulations, which limit circumstances under which an employee may change his or her election once it has been made for a given plan year unless the member experiences a qualifying status change. These restrictions have been relaxed for the 2021 Plan Year.
Mid-Year Increases or Decreases. Employees who elected to participate in the DCAP for Plan Year 2021 can on--a prospective basis only--revoke an election, make a new election, decrease, or increase an existing election. Employees should make sure that their total contributions to the DCAP for 2021 (including any unspent funds from 2020) do not exceed their dependent care expenses.
Mid-Year Enrollment Permitted. Employees who did not sign up to participate in the DCAP for 2021 have the opportunity to enroll in the plan for the remainder of the current Plan Year without demonstrating a qualifying status change.
Claims Submission Reminder. Employees with unused DCAP funds from the 2020 Plan Year, must submit all claims for reimbursement from those (2020) funds no later than December 31, 2021. Employees will have until March 31, 2022 to submit claims for reimbursement of eligible 2021 expenses using amounts contributed to the DCAP in the current calendar year.
Processing Mid-Year Election Changes
All mid-year election/enrollment changes must be submitted to Progressive Benefits Solutions (PBS). Forms for 2021 mid-year elections for DCAP, Form CO-1310a, are posted online at http://www.ctpbs.com. The forms may be returned as follows: Email: enrollment@pbscard.com; Fax: 203-974-4898; or U.S. Mail: Progressive Benefit Solutions, 14 Business Park Drive #8, Branford, CT 06405.
For more information, contact: Progressive Benefits Soluations at 1-866-906-8023