Deductions & credits

If you look at the form 2441 you will see that the max of $6K for 2 kids is first reduced by the $5K from the FSA leaving only $1K for the credit  x  20%  =  $400 credit. 

 

It is not figured this way ... $10K  - $5K fsa = $5K x 20% = $1000 credit