@Yankfanros wrote:
I believe as long as you don’t actually submit a claim for 2021 expenses using your 2021 fsa funds you can roll those fsa funds over to 2022 (and use for 2022 childcare expenses) then you can claim the full 2021 childcare tax credit even with making the fsa deductions in 2021 (since there’s no claims for 2021 expenses)….that’s what I’m planning on doing
That's partially correct, but it's complicated. See here.
https://www.irs.gov/irb/2021-21_IRB
If you planned ahead and did not ask for reimbursement, and paid out of pocket, you can claim the 50% credit, and use the 2021 FSA money in 2022 as a carryover. However, this may be limited by the carryover rules of your plan. Not all plans allow carryovers and the timing and amounts allowed may vary. If you left too large a balance or can't spend it in time in 2022, you will lose the funds.
Also, it's too late for anyone to do this who did not plan ahead. If you requested reimbursement for 2021 expenses from your 2021 FSA, you can't decide to apply the credit instead.
Turbotax will take the FSA benefit from box 10 and will then ask you how much you left in the account as a carryover.
