Deductions & credits

No, you should not be taxed on the carry over.  However, I believe the question is in an unusual place.  When you first enter your W-2 with the FSA in box 10, Turbotax should ask "was this daycare provided on site by your employer" and it should also ask "did you forfeit or carry over any funds".  If you missed that question, try deleting the W-2 and entering it again.