myPay Solutions
This topic discusses Dependent Care Benefits.
What does record Dependent Care Benefits mean
Dependent Care Benefits will need to be processed through a payroll check(s) in order to show on the W-2 form. This is likely an item that has been processed throughout the year; however, in some situations the full amount will be reordered at one time.
Who needs to report Dependent Care Benefits
Any employee eligible for Dependent Care Benefits that has contributed up to $5,000 of pre-tax dollars during the calendar year. The contribution made during the calendar year through payroll checks will show in W2 Box 10.
What are the Dependent Care contribution limits for 2022
| Dependent Care FSA Pretax Contribution Limits | 2022 |
|---|---|
| Account holder is married and files a separate tax return | $2,500.00 |
| Account holder is married and files a joint tax return or files as single/head of household | $5,000.00 |
See www.irs.gov for additional details.
How are Dependent Care Benefits taxed
Up to $5,000 of Dependent Care contributions per calendar year are tax exempt from the following:
- FICA (SS/MED)
- Federal Withholding
- State Withholding (PA Taxable)
- Local Withholding (PA Earned Income Taxable, PA Local Services Taxable, PA Pittsburgh Payroll Taxable)
- Federal Unemployment
- State Unemployment
Do not select a special type of 125.
How would I know if my employees are eligible for Dependent Care Benefits
This is a question that should be directed to your accountant. The Payroll Specialist at myPay Solutions are not able to advise which employees should receive the benefit, but would be happy to help you record the Dependent Care Benefit.
What W-2 box should Dependent Care be reported to?
Box 10 will show the amount on the W-2 for dependent care.
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If Dependent Care Benefit payroll item is not available for the Client to access submit a Payroll item Request form detailing the taxability from above.