AnnaB
New Member

Deductions & credits

There would not be a penalty, you just would not be able to answer the Dependent Care Credit questions to determine if any part is taxable without doing so.  This could happen if you guys had $5,000 in your FSA's and only paid $3,000 in dependent care.  That could trigger $2,000 to become taxable since you don't pay taxes when you contribute.