Reporting Employer-Provided Assistance

If your employer provided you with any dependent care assistance in 2014, it should have been reported in Box 10 of your W-2 Form. If more than $5,000 was provided, the extra amount is taxable and should have been included in Box 1 of the W-2.

To report this amount, you need to complete Parts I and III of Form 2441, Child and Dependent Care Expenses, if you are filing Form 1040 or Form 1040A.

Note that either of these forms will ask you whether you forfeited any benefits this year; that is, whether you had more deducted from your paycheck than you were able to claim reimbursement for. If you have a forfeiture, you don't have to pay taxes on this amount. However, if the amount you had withheld from your paycheck was more than your total wages (or those of your spouse, if married, which is the more likely scenario) you can only deduct the dependent care assistance up to the amount of the wages earned. Anything above that amount would be taxable and must be included in your taxable income amount on Line 7 of your Form 1040 or 1040A.

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