Thanks for the quick answer. I have a follow-up question
when you said
" you did not pay federal or FICA taxes on the amount you did put in the FSA"
This seems not true. According to the statement "The $1,985 of unspent care benefits will be added to your W-2 as taxable income." and my 1040 Form line 1e there is $1,985, meaning I am still taxed for the amount.
This amount is a part of Dependent Care FSA, it should be free of tax if they are used for dependent care, I don't understand why it is still taxable.
