Form 2441 - Dependent Care Benefits

Per IRS Publication 503 Child and Dependent Care Expenses, on page 2:

Dependent care benefits. If you received any dependent care benefits from your employer during the year, you may be able to exclude all or part of them from your income. You must complete Form 2441, Part III, before you can figure the amount of your credit. See Dependent Care Benefits under How To Figure the Credit, later.

On page 10:

Exclusion or deduction. 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. To claim the exclusion, you must complete Part III of Form 2441.

If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. Therefore, you wouldn't get an exclusion from wages. Instead, you would get a deduction on Schedule C (Form 1040), line 14; Schedule E (Form 1040), line 19 or 28; or Schedule F (Form 1040), line 15. To claim the deduction, you must use Form 2441.

The amount you can exclude or deduct 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).

Your employer must give you a Form W-2 Wage and Tax Statement (or similar statement), showing in Box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in Box 1.

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.