@SreeN wrote:
I have incurred $5000 in childcare expenses but missed to file claim within deadline for 2022. I lost 5K and wondering about what the implications are in terms of taxes considering I lost 5K. I still haven't filed my 2022 taxes.
1. Do I get childcare tax credit in 2022?
2. Will $5000 be added back to my W2 income in 2022 or 2023?
3. Do I have to pay taxes on $5000 in 2022? Do I need to file amendment?
Anything else I am missing.
If you left the money in the FSA unclaimed, you still need to run the dependent care interview. One of the questions is "did you forfeit any funds" and you would report that you forfeit the $5000. It is not added back as taxable income because it was forfeit and lost to you. You don't pay tax on it (because it was subtracted from your taxable wages when it was set aside). It's just forfeit--gone, lost.
Because you did not use the FSA, you will still qualify for the dependent care credit if you have eligible child care expenses. The credit is between 20% and 35% of eligible costs up to $3000 for one child or $6000 for 2 or more children. (Most people qualify for 20%.) You need to complete the entire dependent care interview and make sure to indicate that you forfeited those funds.
