jumpbaby
New Member

why my eligible dependent care expenses is only $1005?

Dear All, 

 

I am using turbo tax for my return. Before this year, I got $1200 credit every year. 

 

This year, my family income has a little increase, but we spend similar on the daycare (about 25k per year for two kids). 

However, when I typed my info, I got the following message. . . I cannot understand why my eligible expense is only  $1005 and is not longer the cap value $6000. 

 

Based on your adjusted gross income of $300,980, you can claim 20% of your $1,005 of eligible dependent care expenses.

Get your taxes done using TurboTax

Did you use an FSA?

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jumpbaby
New Member

Get your taxes done using TurboTax

yes, I used roughly 5000 dependant FSA for daycare. I feel that is the answer i am looking for, but if it is ok, could you please provide some quick explanation? Thank you. 

Get your taxes done using TurboTax


@jumpbaby wrote:

yes, I used roughly 5000 dependant FSA for daycare.


The FSA draws from the same set of rules/same pot of expenses.  Your maximum expense eligible for child and dependent care is $6000, if you used an FSA of $4995, then your remaining eligibility would be $1005.

 

In most cases, the FSA saves you more money than the credit, especially if you are in a state with high state income taxes. 

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