Company ABC provides a dependent care assistance flexible sp

Company ABC provides a dependent care assistance flexible spending arrangements to its employees through a cafeteria plan. In addition,Emily used the on-site dependent care several times. The fair market value of the on site care was $700. Emily form W-2 should report $5200of dependent care assistance in BOX 10. If all other conditions are met, what is the maximum amount excludable from gross income for the dependent care expenses Emily can report on her tax return?

Solution

Form W2, an employee can generally exclude the gross income up to $5,000 of benefits received under a dependent care assistance program each year. Therefore, The maximum amount excluded from gross income for the dependent care expenses are 5,000.
The amount in excess of $5,000 should be include in boxes 1,3 and 5 because the excess amount will be non taxable and applicable for taxes.