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Child and Dependent Care Credit & Flexible Benefit Plans

Question: Why did I receive a Form W-2 reporting a benefit of $3,000 in Box 10 when my employer set aside $3,000 in wages for dependent care under a dependent care benefit plan?

Answer:

This type of plan is an agreement to voluntarily reduce your salary in return for an employer-provided fringe benefit.

  • These plans give you a choice of whether to receive cash wages or a benefit for dependent care.
  • You are receiving a tax benefit because you are not paying taxes on the money that is set aside to pay for the dependent care.

Whenever you participate in a dependent care benefits program through your employer, you must complete and attach Form 2441 (PDF), Child and Dependent Care Expenses, to your tax return.

Additional Information:


Category: Child Care Credit, Other Credits
Subcategory: Child and Dependent Care Credit & Flexible Benefit Plans

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The OMB number for this study is 1545-1432.
If you have any comments regarding this study, please write to:
IRS, Tax Products Coordinating Committee
SE:W:CAR:MP:T:T:SP
1111 Constitution Avenue NW
Washington, DC 20224