Yes. With one child, up to $3000 of expenses ($6,000 of expenses paid for two or more Qualifying Persons) can be applied toward the credit. If you paid $5000 through an FSA, the remaining $3,044 will be applied to the credit. In TurboTax, enter your total expenses paid for the year. Your FSA amount would be pulled from your W-2 (box 10) and TurboTax will ask some additional qualifying questions, and perform all the calculations. Form 2441 will show the amount applied against the FSA and the remainder applied to the credit.
If you employer did not put this amount in your W2 (box 10), then you should list it in box 10, as you enter the W2. For the calculations to perform properly this is the correct way to handle it in TurboTax. The FSA, even though paid by you, was paid with tax free funds so it must be accounted for.
