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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:

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

TaxAct® will calculate your exclusion based on the amount entered in Box 10 of Form W-2 Wage and Tax Statement and the amounts entered as paid to providers within the Child and Dependent Care Q&A.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.

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