You do not have to complete the Child and Dependent Care form if your child care expenses do not exceed what you paid for child care.
You are correct that the amount of FSA for 2021 was increased to $10,500.
FSAs are usually funded through voluntary salary reduction agreements with your employer. No employment or federal income taxes are deducted from your contribution. The employer may also contribute.
Note: Unlike HSAs or Archer MSAs which must be reported on your Form 1040, there are no reporting requirements for FSAs on your income tax return. If you have any unused amounts in your FSA, that amount is forfeited, and since you already got a deduction, you cannot deduct the loss. However, for 2021 due to pandemic legislation that aimed to help families with their childcare costs, your employer may allow you to carry-over your entire remaining Dependent Care FSA balance into 2022 and provide a grace period of up to 12 months following the end of the 2021 plan year to use those funds.
In summary, you do not have to report your child care expenses if you used funds from an FSA to pay the expense. There is no reporting requirement than through your W-2 for the FSA funds.
You will want to go back into TurboTax and delete the Child and Dependent Care entries.
To do this in TurboTax Desktop:
- Open up TurboTax if not already open
- Go to Forms
- Scroll down the list to Form 2441
- Underneath the Form across the bottom you can select to "print - delete - close" form.
- Click on "Delete". This will remove the form from your return.
To do this in TurboTax Online:
- Open up TurboTax if not already opened
- Click on "Federal"
- Click on "Deductions and Credits"
- Scroll down to "Dependent Care Credit"
- Click "Edit/Add"
- Click "Yes" to the first two questions (screens)
- On the next screen click on "Delete" next to the daycare provide listed.
