[Individual]Dependent Care Benefits (Feb-16-2011, 62 days left)

You can exclude this benefit from your income, the benefits include:

• Amounts your employer pays directly to either you or your care provider for the care of your qualifying person while you work
• The fair market value of care in a daycare facility provided or sponsored by your employer.

But, the amount is limited to the lesser of :

• Total amount of dependent care benefits you received
• Total amount of qualified expenses you incurred
• Your earned income
• Your spouse’s earned income
• 5,000 (2,500 if married filing separately)

PSQ

Source: http://www.irs.gov