When married filing separately, you are disqualified from the dependent care credit. You can still use a dependent care FSA, but the limit of eligible expenses is $2500, not $5000. Form 2441 is used to report the FSA, calculate the amount of eligible expenses, and in the case of the original poster @dayna1127, the other $2500 would be added back to their taxable income. However you must also have custody of the child more than half the nights of the year. Turbotax should not allow a form to be added to your return unless the credit is allowed, and the IRS should not be rejecting a return with a properly reported FSA. Either Turbotax is reporting something wrong, or the IRS is rejecting the returns incorrectly. I will flag this for investigation.
It is very important that, when parents live together (married filing separately, or unmarried) that the parent who will claim the child as a dependent ignore the custody agreement question ("do you have a custody agreement with the other parent?" Answer No.). This question only applies to legal agreements between parents who are divorced or separated. The other parent should not even list the child on their tax return. When both parents list the child, conflicts can arise because the Turbotax interview is somewhat clumsy when it comes to two parents living in the same home but not filing together. This may be the cause of xavier86's difficulty.
Also, xavier86, if you were answering questions about you paying the child's support, that means you are in the wrong part of the interview. The question should have been, "did the child pay more than half their own support." You may have claimed the child incorrectly and not gotten the appropriate child tax credit. Also, if you have a dependent care benefit in box 10 of your W-2 and didn't attach form 2441, you will get a letter and a bill for extra tax from the IRS. Please print your return and check for form 2441 (part 1 and 3 should be filled out but not part 2) and also check the amount of the child tax credit on form 1040 line 12a and schedule 3, if it is $500 per child and not $2000 per child, you made a mistake in how you identified your dependent.
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