*Married Filing separately
On W-2 box 10 dependent care benefits has 3k listed. My employer sends this money directly to the daycare and it covers a small portion of the tuition. Do I have to claim this as income on my tax return (W-2)? I do not qualify for the child and dependent care expense deduction due to my filing status, but that should not change the rules governing tax free child care benefits from my employer. I ran into issues with the TurboTax app last year sending me through a loop, and want to avoid that again, so checking to see if I have to include this amount as income. I believe it should be tax free, but the app is adding to my income.
*** Reference: Internal Revenue Code (Code) Section 129 allows employers to provide
dependent care assistance benefits for their employees on a tax-free
basis. These benefit plans are referred to as dependent care assistance
programs (DCAPs).
