In the TT program that $5000 you paid into the FSA will be reported on the W-2 box 10 ... did you enter that correctly ? If you did not then you were suprised when you got to the Day Care section and entered that $5K amount which would have reduced the credit the same what as if you put the amount on the W-2 earlier. The program reduced the credit by the amount you could not count ... the credit was only calculated on the $1000 above the $5000 already set aside tax free.
