FSA Question - Dependent Care
HR rosie
16 Posts
Our Employee wishes to enroll in the dependent care assistance program [DCAP].
Employee's spouse is a full time student.
They have two children under the age of 13.
Is there a limit to the amount of expenses they can deduct monthly or annually?
Employee's spouse is a full time student.
They have two children under the age of 13.
Is there a limit to the amount of expenses they can deduct monthly or annually?
Comments
Lisa
Should Line 10, Dependent Care Benefits, of my Form W-2 be included when calculating my income?
A portion of the amount in Box 10 of the Form W-2 may be includable in your income. Please refer to the Instructions for Form 2441, Child and Dependent Care Expenses, to determine how much, if any, of the dependent care benefits may be excluded. If you meet the requirements described in Form 2441 (PDF), Child and Dependent Care Expenses, you can exclude up to $5,000 of dependent care benefits provided under a qualified employer plan. However, this amount is reduced or eliminated if your earned income (or your spouse's earned income) is less than $5,000, or if your child is not under age 13. Any benefits that exceed the exclusion limit ($5,000) are also includable in your income, and your employer should have included these amounts in Boxes 1, 3, and 5 of your Form W-2 in addition to reporting these amounts in Box 10. The amount you can exclude is figured and claimed by completing Part III of Form 2441 or Schedule 2 of Form 1040A.
References:
Publication 503, Child and Dependent Care Expenses
Form 2441 (PDF), Child and Dependent Care Expenses
Instructions for Form 2441, Child and Dependent Care Expenses
Your spouse is treated as having earned income for any month that he or she is:
1) A full-time student, or
2) Physically or mentally not able to care for himself or herself.