|
Employees may elect to have up to $5,000 excluded from gross income annually under an employer dependent care benefit plan. Dependent care benefits are not included in wages. The plan may be paid with employee's pre-tax earnings or paid by the employer. If your benefit exceeds the actual expenses for the year, the excess is forfeited. However, the full amount including the excess is still excluded from taxable income.
The Dependent Care Tax Creditis available if your employer does not sponsor a dependent care benefit plan. The tax-free benefit and the amount available for the credit are limited to the earned income of the taxpayer or spouse, whichever is less.
|
