Partners are eligible for the Code Sec. 129 dependent care assistance exclusion. The exclusion is for amounts provided under a written plan of the employer and is limited annually to $5,000 ($2,500 for a married person filing separately). However, for a plan to qualify as a dependent care assistance program, no more than 25% of the amount paid or incurred by the employer for dependent care assistance during the year may be provided for the class of individuals who are shareholders or owners and their spouses or dependents, each of whom (on any day of the year) owns more than 5% of the stock or of the capital or profit interest in the employer.
