When first entered the W-2, the program assumes you did NOT qualify for it. So it immediately makes it taxable.
After you enter the child care information, it potentially removes or changes that.
Because it was unspent (and other carried over or forfeited), it is NOT taxable. If it was allowed to be carried over, it still qualifies as pre-tax because it will be used for qualifying expenses (or eventually forfeited). If it was forfeited, you've already lost $2000, so they don't make you pay tax on something that you've forfeited.
