"Employers may contribute up to $2,500 per year (adjusted for inflation), on a tax-free basis, on behalf of their employees' dependents or their teenage employees. Contributions in excess of $2,500 will be treated as taxable income to the employee. Employers can claim a tax deduction for such contributions as a business expense. However, employer contributions will require a written plan document, and the program will have to comply with certain rules applicable to dependent care FSA accounts under Code Section 129(d) (e.g., related to nondiscrimination and statement of expenses)."  MORE >>