Each year employers are required to provide wage and tax statements to each employee and the Internal Revenue Service (IRS), known as Form W-2. This form collectively reports the total annual wages the employee received as well as any taxes that were withheld from the employee’s paycheck.
Earlier this year, the American Rescue Plan Act of 2021 (ARPA) was enacted to provide additional economic relief efforts from the COVID-19 pandemic. As part of the ARPA, for taxable year January 1, 2021, through December 31, 2021, pretax dependent care assistance was increased from $5,000 to $10,500 per household ($5,250 for employees married filing separately).
The IRS updated 2021 Form W-2 Box 10 Instructions to reflect this change. Digital versions of the 2021 Form W-2 instructions reflect this change. The Instructions for Employees document has also been updated.
Additional information about these changes can be found on the IRS website.
Employers Next Steps
- If you are Full-Service or a Managed Payroll client and would like these instructions uploaded to your ADP Workforce Now Home Page as a resource for your employees, please contact your Client Account Manager
- If you are a Full-Service or Managed Payroll client and have questions about this e-Alert, please email us.
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This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable laws in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this content, please contact HR Knowledge at 508.339.1300 or email us.