Hi -
My spouse's employer has a July 1 through June 30 fiscal year (and the same plan year for their benefits). Her W-2 shows an amount in box 10 for the current year (2021). We don't have any qualified child care expenses in 2021, but all of the withheld amount was validly used. Will TurboTax inappropriately add the deducted amount back in to my federal taxable income?
This arose because:
- We stopped incurring eligible child care expenses in late 2020 due our child's age.
- We listed a certain amount of child care expenses at the start of the plan year, so my spouse's employer spread the pre-tax deductions through the entire plan year - a portion of which was in 2021, even though the expenses were all in 2020.
- We didn't lose any money from the FSA, because the 2020 expenses had already been submitted, so we were reimbursed as the remaining deductions were made.
I just want to make sure TurboTax isn't increasing my spouse's taxable wages by the Box 10 amount out of the assumption that it wasn't used on eligible dependent care. (If, instead, TurboTax isn't doing anything with that amount from a tax perspective--but just assuming we lost it by not having eligible expenses, that's probably fine, since we know we actually got the money back.)
Thanks!
