Dependent Care

Dependent care is a special type of allowance used to pay for the care of qualified family members. On the Payroll tab, click Tax Setup > Benefits/Allowances > Dependent Care.

All dependent care entries must begin with the letters DPCR, followed by an amount. The amount is the maximum amount of reimbursement an employee can have under the tax law. Allowances under the amount are not taxed, while amounts over the amount are taxed. These amounts and other information are located in the IRS Circular E.

The program finds entries in the employee's QTD & YTD Totals window that have DPCR selected in the Type column (see View QTD and YTD Totals), and then it prints the total amount of employer dependent care on the W-2. Any amount the employee receives in excess of the limit is included as wages on the W-2.

CAUTION:

If the dependent care limits change, you must enter the new amounts in this window before you print paychecks for the new year. Do not change the amounts if you haven't printed the W-2s, End of Quarter, or End of Year reports. Changing the existing limits before performing these processes affects the QTD & YTD totals.

To print paychecks for the new year before completing these processes, you must create new entries in this window for the new year.