Hello -- my employer offers a dependent care fsa that we contributed the maximum $5k to via pre-tax contributions during the year. We used that money to reimburse ourselves for eligible dependent care expenses (daycare expense for 1 child). I also have 2 other children that both go to an afterschool program and one of the children is in pre-school. Both of these expenses qualify as eligible dependent care expenses. Prior to opening the dependent care FSA, I understood that I could use FSA funds to pay eligible dependent care expense and as long as I separated the pool of funds and could also take advantage of the dependent care tax credit. Said differently, I planned to use FSA funds for dependent care expenses for 1 child which used all of the $5k set aside in the FSA and then use the dependent child care credit on my other two children for expenses incurred at preschool and after school. However, when I input the W2, the $5k is included in Box 10 which TurboTax suggests should only be populated if the employer reimburses for dependent care which is not the case as we simply contribute pre-tax to the account at our election. This is also reducing the available dependent care tax credit. Is it a limitation of the software and I need to manually $0 out Box 10 in the W-2 input screen or a mistake by the employer building the W2 or am I missing something in my thought process?
