Question
Should I include the amount in box 10, Dependent Care Benefits, of my Form W-2 when calculating my income?
Answer

Box 10 of your W-2 shows the total amount of dependent care benefits that your employer paid to you or incurred on your behalf. Amounts over $5,000 are also included in box 1.

You must complete Part III of Form 2441, Child and Dependent Care Expenses to figure the amount, if any, that you can exclude from your income.