You should report the $7,011. It will be less than what is reported by the daycare center, so the IRS will not be concerned about it. They may only be concerned if you reported more than what the daycare reported.
Your allowed daycare expenses will be limited to the amount over what you contributed to the dependent care reimbursement account. That amount should be reported on your W-2 form and represents income that is not taxed. You can't get the tax benefit of that and take a dependent care credit for the same money.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
