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Please provide an example showing when child care subsidy payments will be taxed?

April 26, 2017child care PAYMENTS subsidy TAXED

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Please provide an example showing when child care subsidy payments will be taxed?

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A7. An employee (married filing jointly) receives $400 per month for child care subsidy. The employee also participates in the DCFSA program, with $125 withheld each pay period. The employees combined total of child care subsidy plus DCFSA is $4,775 through pay period 08-16. In pay period 08-17 the employee receives $400 for child care subsidy and has $125 withheld for DCFSA. Therefore, the employees child care subsidy plus DCFSA through pay period 08-17 is $5,225. Because only $5,000 can be excluded from taxes, taxes will be withheld on $225 from the employees pay in pay period 08-17 and for all child care subsidy payments and DCFSA withholdings for the remainder of the year.