3627 / What reporting requirements apply with respect to an employer-sponsored dependent care assistance program?

An employee cannot exclude from gross income any amount paid or incurred by the employer for dependent care assistance unless the name, address, and taxpayer identification number of the person (name and address in the case of a tax-exempt 501(c)(3) organization) providing the services are included on the return. If this information was not provided, but the taxpayer exercised due diligence in attempting to do so, the amount shall not be included in the employee’s gross income.¹

IRC Section 6039D generally requires an employer maintaining a dependent care assistance plan to file an information return with the IRS that indicates:

(1) its number of employees;

(2) the number of employees eligible to participate in the plan;

(3) the number of employees participating in the plan;

(4) the number of highly compensated employees (“HCEs”) of the employer;

(5) the number of HCEs eligible to participate in the plan;

(6) the number of HCEs actually participating in the plan;

(7) the cost of the plan;

(8) the identity of the employer; and

(9) the type of business in which it is engaged.

For plan years beginning prior to the issuance of further guidance from the IRS, these reporting requirements are suspended for dependent care assistance plans.²

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1. IRC § 129(e)(9).

2. Notice 2002-24, 2002-16 IRB 785; Notice 90-24, 1990-1 CB 335.