I have a client that brought in a W-2 with almost $10,000 listed in box ten of her W-2. Her employer is a Daycare Provider and she receives a discount for her own children while she works. I looked at her childcare statement and the discount is listed on her statement as the same amount that's on her W-2. I looked at a pay stub and she is paying her portion of the childcare with after tax dollars.
I have a problem with this. First, I'm not sure the discount should be taxable to her as I'm not sure there are substantial additional costs to the Daycare, and even if the discount is taxable it should be in box 1,3 and 5 subject to Fica and Medicare and then there would also have been withholding subtracted.
Anyone else ever dealt with this?
Thanks
I have a problem with this. First, I'm not sure the discount should be taxable to her as I'm not sure there are substantial additional costs to the Daycare, and even if the discount is taxable it should be in box 1,3 and 5 subject to Fica and Medicare and then there would also have been withholding subtracted.
Anyone else ever dealt with this?
Thanks
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