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Child and Dependent Care Credit & Flexible Benefit Plans

Question: Why does my Form W-2 report a benefit of $3,000 in box 10 when my employer set aside $3,000 in wages for dependent care under a dependent care assistance plan?

Answer:

When you choose to participate in a dependent care assistance program through your employer, your employer has to report that value in box 10 of your Form W-2. This type of plan is a voluntary agreement to reduce your salary in return for an employer-provided fringe benefit.

You're receiving a tax benefit because under the plan, you're not paying taxes on the money set aside to pay for the dependent care.

You must complete and attach Form 2441, Child and Dependent Care Expenses, to your tax return.

Additional Information:


Category: Childcare 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