Donna Klein, Executive Chair of Corporate Voices was quoted in a recent Parade magazine article about the affordability of quality child care.
The article states that two-thirds of all American women are working by the time their first child is a year old, compared with only 17% four decades ago. The cost of child care—which has risen by as much as 11% in the last two years—varies widely, depending on such factors as location, type of care, and the age of the child. Nationwide, the cost ranges from $3380 to $10,787 for one preschooler, according to the National Association of Child Care Resource & Referral Agencies. Full-time care for one infant at a center can be as much as $15,895 a year. A full-time babysitter may cost from $400 to $1,000 a week, depending on where you live.
Corporate Voices has been taking a leading role in advocating for an increase in the cap of dependent care spending accounts. The current DCFSA cap was a figure that was established in the Tax Reform Act of 1986. More than 20 years have passed and in today’s dollars, this tax benefit is worth only $2,800, even as the cost of child care has dramatically increased.
According to federal law, any employer can establish a DCAP (Dependent Care Account Program), allowing employees to set aside up to $5,000 of pre-tax income (or a lower ceiling, if the employer chooses) to help cover the cost of child care, elder care, or care of a disabled spouse or disabled dependent. Employees do not have to pay federal income taxes or Social Security and Medicare taxes on the funds they’ve set aside. They can save—depending on their incomes—between $1,100 – $2,600 a year on their child care or dependent care expenses.
By Allison Tomei