Box 10 on my W-2 for dependent care is $2000, and my expenses were $2000. Do I still put $2000 in child or dependent care under deductions and credits. Thanks!

Forum|Forum|6 years ago
February 1, 2020
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KathrynG3

Level 14

The child and dependent care credit is for expenses over the amount in Box 10.

However, you still need to fill out Part III of the form 2441 Child and Dependent Care Expenses to prove you used the Box 10 amount for child care. See this IRS Frequently Asked Question for further explanation.

Only amounts over $5,000 for a married filing joint taxpayer will be included in Box 1, Wages, on the W-2.

waldt002

Level 2

Doesn't answer my situation. Employer pays a "scholarship" to the day care center based on the employees annual salary for care of the child. That amount appears in box 10 of the W2. The employee pays an additional amount for care of the child and receives a statement at the end of the year for the amount they paid. If the scholarship was $3,100 and the employee paid $1,500, I would suspect that the qualified expenses for child care (line 2c) would be $4,600. By doing so, none of the Scholarship dollars become taxable benefits (Part 3, line 26). By not including the scholarship dollars in the expense, a portion become taxable income. Does thise make sense?

VictoriaD75

Level 12

The "scholarship" or day care expense covered by the employer (box 10 of W-2) should not be included in taxable income as long as you have offsetting expenses. Enter the full amount of daycare expenses in the Deductions & Credits section, $4,600. The first $3,100 will be offset by the amount reported on the W-2.

The credit for dependent care will be based on the out of pocket amount of $1,500. You are already receiving the tax benefit from the $3,100, as it is not included in taxable income. Therefore, that amount is not included in the calculation of the credit.

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