Question

An employee's gross for the year is 30,000 In which box on Form W-2 must an employer provided dependent care assistance be included when it exceeds $5,000?

A. Box 1 and 10
B. Box 1, 3 and 5
C. Box 10
D. Box 1, 3, 5 and 10

Answer 1

Option (D), Employer-provided dependent care assistance exceeding $5,000 must be reported in Box 1, 3, 5, and 10 of Form W-2 as it becomes taxable income beyond the exclusion limit.

Step-by-step explanation:

The question pertains to dependent care assistance reported on an employee's Form W-2. Specifically, when an employer's provided dependent care assistance exceeds $5,000, the excess must be included in several boxes on the Form W-2. The correct answer is Box 1, 3, 5, and 10.

This means any amounts over the $5,000 exclusion limit for dependent care benefits must be recognized as taxable income and reported in box 1, which also affects Social Security wages reported in box 3 and Medicare wages and tips reported in box 5. Additionally, box 10 reports the total amount of dependent benefits, including amounts over the $5,000 that are not excluded from taxable income.