You will pay tax on it since it did not qualify as tax exempt. TurboTax (TT) handles this somewhat automatically.
The $2000 dependent care benefit is in box 10 of your W-2. When TT sees that it will send you to the dependent care interview. When you fail to qualify, TT will complete form 2441 to calculate the taxable portion (all, in your case) and add the $2000 to line 7 of form 1040, with the notation DCB
