Here's TurboTax's explanation of why the $1,583 is being added as taxable income: "Since your $11,772 in care expenses wasn't enough to use up the $4,583 you contributed to your employer's dependent care plan, your Child and Dependent Care Credit is $0. The $1,583 of unspent care benefits will be added to your W-2 as taxable income."
This makes no sense to me. The program is treating $11,772 as a smaller amount than $4,583.
