@peachette19 wrote:
Please let me know if you find a fix. I’m in the exact same situation and it makes no sense that only one spouse can exclude the $2,500 from their income - what’s the point of the FSA if it’s added back to income at the end of the year? I had this exact issue last year and couldn’t get my tax software to understand it so I had to paper file. I was correct (I could use the $2500 for dependent care for a child I didn’t claim as my dependent) and the IRS adjusted my return accordingly. But I thought I’d try TT this year to save the trouble. Oh well.
That is simply how the law was written. There are many tax benefits that are reduced or denied when filing as "married filing separately" and this is one of them. The maximum FSA exclusion is $2500 and only applies to the parent who claims the child as a dependent.
