Thanks for the quick response. Yes the excluded benefits are considered in line 3 in the worksheet for comparison with line 1 (not deducted from line 1), so don't appear to be accounted for if Line 1 ends up being the lesser amount. Also why would the instruction include the admonition to not include amounts excluded from taxable income if it intended for that amount to be incorporated later?
For illustrative purposes:
1. Enter the amount of qualified expenses you incurred and paid in 2023. Don’t include amounts paid by your employer or excluded from taxable income: TurboTax inserts the amount from IRS Form 2441, Line 1(e) (total amount of expenses not reduced by any reimbursement amounts) $5000 for purposes of example.
2. Enter $12,000 for one or more child or dependent cared for during the year: $12,000
3. Enter excluded benefits from Part III of Form 2441: $2,500
4. Subtract line 3 from line 2. If zero or less, stop. You can’t claim the deduction: $9,500
5. Enter your earned income: $100,000
6. If married filing a joint return, enter your spouse’s earned income. All others enter the amount from line 5: $100,000
7. Enter the smallest of lines 1, 4, 5, or 6 here and on Form 39R, Part B, line 6: $5,000
Shouldn’t line 1 be using the amount fro IRS Form 2441, Line 2(d) (amount of expenses not including reimbursed amounts)?
