Box 10 is bad in year 2021 !!

Forum|Forum|4 years ago
March 6, 2022
2 replies
28 views

Hi everyone, in year 2021 you could potentially get back 50 % of your childcare that you put on form 2441.

however if you took off the money from income in box 10 of your W2 then all it does It make your income lower by that amount but you loose out on getting 50 % back (fully refundable).

Is there any solution how to put it back in your income to gain more refundable amount?

Best answer by Aby 3

I see that you totally missed my point, to be more clear usually when you put money in box 10 for childcare you get the benefit of not paying taxes on that money because it reduces your income for that amount that was designated for child care. In year 2021 if both spouses worked then you will be getting (refundable ) 50% of all childcare back but if you used this year the box 10 option then you are only saving that amount of not counting as income but are losing out on the 50 % Refundable credit for child care .

Example : if you put 5000 in box 10 then only 5000 is not counted as income if your in the lowest bracket it's about a 10% gain 500 but if you have box 10 empty and put down 5000 as child care on form 2441 u will get 2500 fully refundable, so in year 2021 its a poor move to use the box 10 option.

J

JohnW152

Level 15

No, there’s no option to do anything like that.

The IRS is aware of the dependent care benefits included in Box 10 of your Form W-2, and would most likely contact you if you didn’t report those benefits on Form 2441.

Please see What is the Child and Dependent Care Credit? for more information.

A

Aby 3AuthorAnswer

Level 2

I see that you totally missed my point, to be more clear usually when you put money in box 10 for childcare you get the benefit of not paying taxes on that money because it reduces your income for that amount that was designated for child care. In year 2021 if both spouses worked then you will be getting (refundable ) 50% of all childcare back but if you used this year the box 10 option then you are only saving that amount of not counting as income but are losing out on the 50 % Refundable credit for child care .

Example : if you put 5000 in box 10 then only 5000 is not counted as income if your in the lowest bracket it's about a 10% gain 500 but if you have box 10 empty and put down 5000 as child care on form 2441 u will get 2500 fully refundable, so in year 2021 its a poor move to use the box 10 option.