Guidance Regarding Dependent Care Assistance

WASHINGTON - The Internal Revenue Service today provided guidance to employers who must report amounts of dependent care assistance furnished to their employees in 1988. This new reporting requirement was contained in the Technical and Miscellaneous Revenue Act of 1988.

Notice 89-13, setting forth the guidance is attached and will be published in Internal Revenue Bulletin No. 1989-4, dated Jan. 23, 1989.

NOTICE 89-13

This notice provides guidance for reporting on Form W-2, Wage and Tax Statement, the amount of dependent care assistance furnished by an employer to an employee, based on the recent amendment of section 6051(a) of the Internal Revenue Code by section 1011B(c)(2)(B) of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647 (Act).

Section 1011B(c)(2)(B) of the Act added a new paragraph (9) to section 6051(a) of the Code to require an employer to show on the written statement to employees required by this Code section the total amount incurred for dependent care assistance with respect to an employee under a dependent care assistance program described in section 129(d) of the Code. Section 1011B(c)(2)(B) of the Act applies to tax years beginning after December 31, 1987.

For 1988, the dependent care assistance amount should be shown in Box 16 of Form W-2. However, because of the late imposition of this new reporting requirement by Congress, the Internal Revenue Service will consider the reporting requirement to be met for 1988 if the employer maintains adequate records concerning these amounts, and on or before January 31, 1989, a written statement is furnished to each employee showing the amount paid or expenses incurred with respect to 1988, in providing dependent care assistance to such employee as required by section 129(d)(6) of the Code. Information concerning dependent care assistance reporting requirements for subsequent years will be issued at a later date.

This document serves as an "administrative pronouncement" as that term is described in section 1.6661-3(b)(2) of the Income Tax Regulations, and may be relied upon to the same extent as a revenue ruling or revenue procedure.

DRAFTING INFORMATION

The principal author of this notice is Joel S. Rutstein of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this notice, contact Mr. Rutstein on (202) 566-4509 (not a toll-free call).

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