Box 10 is bad in year 2021 !!

[Aby 3]

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?

[JohnW152]

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.

[Elliottahquin]

Why is it bad and how do I fix it?

[LeonardS]

There is not a problem with Box 10 and it does not require any action to fix it.  The post by@JohnW152 provides an explanation of your question.

@Elliottahquin

[Aby 3 · Accepted solution]

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.

[Aby 3]

See my new post for clarity

[Aby 3]

My point was not to ignore a filled in box on a w2 all I was saying that its a poor decision to use that credit in year 2021 see my new post