Dependent Care Benefits

DEFINITION of 'Dependent Care Benefits'

Benefits provided by an employer to an employee for use in caring for dependents such as newborns or disabled persons. Dependent care benefits are part of the overall employee benefits plan and can be found in box 10 of the employee's W-2 form.

BREAKING DOWN 'Dependent Care Benefits'

Most employers will offer some level of benefits. For example, a company could provide a daycare center for employees or give time off to care for newly adopted children or dependent elderly persons.

The first $5,000 ($2,500 if your filing status is married filing separately) of dependent care benefits are tax-free. This also applies to pretax deferrals to a flexible spending account earmarked for dependent care.

RELATED TERMS
  1. Benefit Allowance

    Money that a company or government agency provides to an employee ...
  2. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  3. W-2 Form

    The W-2 form reports an employee's annual wages and the amount ...
  4. Employer-Sponsored Plan

    A type of benefit plan that an employer offers for the benefit ...
  5. Other Post-Retirement Benefits

    Benefits, other than pension distributions, paid to employees ...
  6. Essential Health Benefits

    A set of benefit requirements that must be included in certain ...
Related Articles
  1. Taxes

    Understanding the W-2 Form

    The W-2 Form is a standard Internal Revenue Service (IRS) form that employers are required to furnish employees at the end of each year.
  2. Personal Finance

    Life Insurance Plans to Help Your Small Business Retain Employees

    How to use and design cash value life insurance plans as an incentive to help attract and retain key employees.
  3. Savings

    Flexible Spending Accounts: Dependent Care Rules

    If your company offers it – and you meet the criteria – a dependent care account can help you save on childcare and care for other dependents.
  4. What Long-Term Care Insurance Protects Against

    Because long-term care can be so expensive, not to mention labor-intensive, long-term care insurance exists to protect against exhausting your personal assets or burdening your loved ones. In ...
  5. Investing

    Advising FAs: Explaining Long-term Care Insurance to Clients

    As our life spans are extended, our family structures change and medical care improves, the need for long-term care (LTC) will continue to increase.
  6. Your Clients

    A Guide to Social Security Dependent Benefits

    Advisors and their clients tend to focus on Social Security retirement benefits. Social Security also offers dependent benefits. Here's how they work.
  7. Wealth Management

    How Linked Benefit Insurance Policies Work

    Linked benefit policies can be a viable alternative to traditional long-term care insurance. Here's how they work.
  8. Professionals

    Split Dollar Life Insurance: How it Works

    Understanding how split dollar life insurance plans are designed and what tax regulations they must follow.
  9. Professionals

    6 Benefits You're Required by Law to Offer Your Employees

    Learn about the benefits that a business must offer to employees, such as family and medical leave, as well as various forms of insurance coverage.
  10. Retirement

    How Social Security Benefits Are Estimated & Taxed

    The Social Security check you'll get depends on your work history, when you start claiming a benefit and these other factors.
RELATED FAQS
  1. What are some examples of common fringe benefits?

    Learn how offering fringe benefits can be a strategic recruitment and retention tool for employers and drastically increase ... Read Answer >>
  2. What is IRS Form W-2 used for?

    Any employer who pays an employee $600 or more for the year, including noncash forms of remuneration, must file a form W-2 ... Read Answer >>
  3. How do I report Simple IRA contributions on a W2?

    Learn how Savings Incentive Match for Employees, or SIMPLE IRA, contributions are reported for the participant on Form W2 ... Read Answer >>
  4. What does a merger or acquisition mean for the target company's employees?

    Learn about the likely impacts of a mergers & acquisition deal on the target company's employees, their benefits and adjusting ... Read Answer >>
  5. What incentives does an employer have in offering fringe benefits?

    Learn how offering fringe benefits is a powerful business tool for employers to attract and retain quality employees while ... Read Answer >>
  6. How are an employee's fringe benefits taxed?

    Discover how receiving fringe benefits can increase total compensation for employees and how it is important to understand ... Read Answer >>
Hot Definitions
  1. Physical Capital

    Physical capital is one of the three main factors of production in economic theory. It consists of manmade goods that assist ...
  2. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  3. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  4. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  5. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  6. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
Trading Center