Form W-2 - Exclusion From Income

If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. Your employer can tell you whether your benefit plan qualifies.

The amount you can exclude is limited to the smallest of:

  1. The total amount of dependent care benefits you received during the year,
  2. The total amount of qualified expenses you incurred during the year,
  3. Your earned income,
  4. Your spouse's earned income, or
  5. $5,000 ($2,500 if married filing separately).

TaxAct® will calculate your exclusion based on the amount entered in box 10 of your W-2 and the amounts entered as paid to providers during the Child and Dependent Care Q&A.