What is the maximum amount excludable from an employee's gross income for dependent care assistance per year?

Understand the Problem

The question is asking for the limit on the amount of dependent care assistance that can be excluded from an employee's taxable income annually. This involves understanding tax regulations regarding employee benefits.

More Information

The typical maximum exclusion for dependent care assistance from gross income is $5,000 per year, or $2,500 if married filing separately. This can help reduce taxable income for working parents.

Tips

Ensure to distinguish between regular yearly limits and temporary increases which might be enacted in special circumstances like a pandemic.

Sources

• Publication 503 (2024), Child and Dependent Care Expenses - IRS - irs.gov
• 26 U.S. Code § 129 - Dependent care assistance programs - law.cornell.edu
• Dependent care assistance unused balances are excluded from ... - Journal of Accountancy - journalofaccountancy.com