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?
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.
- Publication 503, Child and Dependent Care Expenses
- Publication 17, Your Federal Income Tax for Individuals
- Instructions for Form 2441 (.pdf), Child and Dependent Care Expenses
- Tax Topic 602, Child and Dependent Care Credit
Category: Child Care Credit, Other Credits
Subcategory: Child and Dependent Care Credit & Flexible Benefit Plans