Is box 10 of W2 ( dependent care benefits ) taxable. should this be included in the w2 income

[DianeW]

The amount in box 10 should not be included in box 1.  However, if you did not complete the child care section of your return it will be automatically added to your taxable wages.  You must show that you paid that much in child care expenses or it is no longer a tax free benefit.

While you are logged into your TurboTax Premier account follow these steps to enter your child care expenses.

• Federal Taxes tab > Wages & Income> Your W2 > Edit > None for Uncommon Situations >
  
• Continue to enter your FSA Childcare information
  
• Click the screenshot attached to enlarge and view
• Once this is completed then go back to the Child & Dependent Care to enter the provider and the expenses to complete the tax free portion.

The money you put in your FSA is reported in box 10. If you provide your provider info and care expenses, this money stays tax free. However, if you do not enter your provider info, that money get's added back to taxable income as you would not qualify for  a tax free FSA without entering care expenses. That said, you do not qualify for the dependent care credit if your FSA is more than the expenses claimable for the credit and/or because your wife doesn't work (so for one child and an FSA of more than $3000, no dependent care credit.

{Edited:  04.11.2016 | 5:33a PDT}

[bhuprak]

i dont qualify for child credit. so its get added to my income

[DianeW]

If you had no child care expenses, yes it gets added to your income.

[bhuprak]

no i had child care expenses  its just that my wife is not working and i dont qualify. please check the rules before giving an answer

[DianeW]

I updated the answer with the path to answer the FSA questions concerning your child care.  This will clear the issue for you.  It's the W2 entry that will eliminate taxing any dollars spent on childcare.  Thank you for your patience.

[ChristinaR]

@bhuprak,  even though you may not qualify for the Child and Dependent Care Credit, it is still important to walk through that section and enter in your provider and expenses so that it offsets the amount in box 10.  You are correct that any excess will then be transferred to your wages.   If that is the case, you'll notice the abbreviation "DCB" off to the left of that line on your form.