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One Big Beautiful Bill Act Increases DCAP FSA Limit in 2026
Starting in 2026, the maximum annual contribution limits to a DCAP FSA will rise significantly to $7,500, providing employees with greater flexibility in saving for dependent care expenses.
With the upcoming implementation of the “One Big Beautiful Bill Act” in 2026, there are exciting developments that will further enhance the DCAP FSA.
BRADENTON, FL, UNITED STATES, November 5, 2025 /EINPresswire.com/ — As the cost of childcare continues to rise, employers and employees alike are constantly seeking ways to alleviate the financial burden. The Section 129 Dependent Care Assistance Plan FSA, also known as DCAP FSA, has been a popular option for many companies and their employees. With the recent passing of the One Big Beautiful Bill Act, the benefits of DCAP FSA plans have become even more attractive for both parties.
The One Big Beautiful Bill Act, set to take effect in 2026, aims to increase the maximum contribution limit for DCAP FSA plans from $5,000 to $7,500. This means that employees can now save even more on their taxes by setting aside pre-tax dollars for dependent care expenses, such as daycare, after-school programs, and summer camps. This increase in the contribution limit will provide much-needed relief for working parents and allow them to better manage their finances.
But the benefits of DCAP FSA plans don’t stop there. Employers also stand to gain from offering this benefit to their employees. By providing a DCAP FSA plan, employers can save on payroll taxes and potentially attract and retain top talent. Additionally, with the increase in the contribution limit, employees may be more likely to participate in the plan, resulting in even more tax savings for the company.
At Core Documents, we understand the importance of offering competitive benefits to employees while also helping employers save on taxes. Our team of experts can assist clients in setting up a DCAP FSA plan that meets all legal requirements and maximizes tax savings for both employers and employees. With our easy-to-use online platform, clients can easily manage their DCAP FSA plans and ensure compliance with the One Big Beautiful Bill Act.
In conclusion, the One Big Beautiful Bill Act has brought about significant changes to DCAP FSA plans, making them an even more valuable benefit for both employers and employees. With the increase in the contribution limit, employees can save more on taxes, while employers can save on payroll taxes and attract top talent. And with the help of Core Documents, setting up a DCAP FSA plan has never been easier. Contact us today to learn more about how we can help you and your employees reap the benefits of a DCAP FSA plan.
About Core Documents
Core Documents is a leading provider of employee benefit solutions, helping businesses manage and optimize their benefits packages. Our mission is to help employers create competitive, cost-effective benefits programs that provide real value to employees. With a focus on compliance, efficiency, and employee satisfaction, Core Documents has been helping companies succeed for over 27 years.
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Executive Summary of the Dependent Care Assistance Plan FSA: