IRS Publishes Updated Versions of Publications 502 and 503 and Form 2441 (Including Instructions)

The IRS recently released the updated versions of Publications 502 (Medical and Dental Expenses) and 503 (Child and Dependent Care Expenses), as well as Form 2441 (Child and Dependent Care Expenses) and the related Instructions. The publications and forms have been updated for use in preparing taxpayers’ 2017 federal income tax returns.

Publication 502 describes which medical expenses are deductible. For employers, Publication 502 provides valuable guidance on which expenses might qualify as IRC Section 213(d) medical expenses, which is helpful in identifying expenses that may be reimbursed or paid by a health FSA, HRA (or other employer-sponsored group health plan) or an HSA. (However, employers should understand that Publication 502 does not include all of the rules for reimbursing expenses under those plans.)

Publication 503 describes the requirements relating to the dependent care tax credit (DCTC). It is directed primarily at taxpayers to help determine their eligibility for the DCTC. Importantly, employers should understand that the DCTC requirements are different from those relating to employer-sponsored dependent care assistance programs (DCAPs, or dependent care FSAs).

There are no major changes to the 2017 versions of Publications 502 and 503, as compared to the 2016 versions. But the 2017 versions contain updated dollar amounts (for example, the standard mileage rate for use of an automobile to obtain medical care) and other numbers.

The 2017 Form 2441 (and Instructions) would be filed with taxpayers’ Forms 1040 to determine the DCTC amount for which they are eligible. Employees that participate in a DCAP (dependent care FSA) must also file Form 2441 with their Form 1040 to substantiate the income exclusion for their DCAP reimbursements. So, while the Form 2441 is filed only by individuals, employers may get questions on the form from DCAP participating employees. As compared to 2016, there are no noteworthy changes to Form 2441 or the related Instructions.

Publication 502 »
Publication 503 »
Form 2441 »
Instruction for Form 2441 »