There are generally two ways to get tax benefits from Child or Dependent Care:
- Income excluded through your employer
- The Child and Dependent Care credit on actual expenses
It is important to remember these two cases. As Mike explained above, depending on your situation, you may qualify for both.
The income equal to contributions to your Dependent Care FSA is found in box 10 on your W-2. This amount is not even included in your income, so it is tax-free, so long as you spend your FSA dollars on Dependent Care.
As Mike noted above, $8k is the limit for tax benefits for one dependent ($15k for two or more). So if you don't reach the $8k limit with your FSA contributions (box 10), you can use the remaining amount (up to the limit) to apply towards the tax credit on form 2441.
NOTE, if you have an entry in box 10 of your W-2, TurboTax will prompt you to make the entries that apply to the 2441 (Child and Dependent Care Credit), so TurboTax will walk you through being able to take advantage of the income exclusion (box 10) and the credit.
Mike gave you a good description of what happens tax-wise, but just let TurboTax walk you through the 2441, and refer back to his comments to understand what you did.
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