If Box 10 on your W-2 contains the amount of Dependent Care Benefits (Pre Tax) which exceeded the amounts you paid out in 2020 for Dependent Care, such excess , Turbo Tax is including such amount in your income. You are required to complete Form 2441, and it will clearly show that you have an excess contribution, and it will be automatically added to your Gross Income. I have researched this very thoroughly and cannot find anywhere in IRC Sections 125 and 129 that considers it taxable or not. The new Consolidated Appropriations Act, 2021 (H.R. 133, P.L. 116-260) signed into Law on December 27,2020 provides temporary relief for taxpayers that were unable to spend down their Dependent Care by the end of the year and would risk forfeit of their contributions. Providing a taxpayer's plan permits it, such unused amounts can be carried forward to 2021 and 2022. Thus taxpayer's will not lose such amounts. However as to whether the unused amounts in 2020 are taxable in 2020, nothingnnin the law indicates either way, except Turbo Tax is including such amounts in a taxpayer's gross income
