I enrolled in dependent care beginning in Jan 2016 for $5,000. My husband's open enrollment began in Sept & we did $5,000 again. Will we face a fine for overlapping?

Forum|Forum|7 years ago
June 1, 2019
4 replies
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We will both be withholding from dependent care from Sept-Dec.
We are trying to in-enroll my husband, but may not be able to.

SweetieJean

Alumni - Champ

Was Hubby's open enrollment for 2016, or effective 1/1/2017?

Opus 17

Level 15

And is he on a different plan year than January to December.

leah-mowreyAuthor

Level 2

Thank you for the help! His plan is Sept-Aug which caused the overlap. We'll plan to pay the tax for the additional contribution.

Opus 17

Level 15

You can't exclude more than $5000 between the 2 of you in a given tax year. If you pay for more than $5000 of care in 2016, then the amount over $5000 will be considered non-qualified, and will be added back to your taxable income. (Fortunately there is no additional penalty, just the income tax on the wages.)

If his plan was for 2017, or was for a different fiscal year (like October 2016-September 2017) then just don't withdraw and money from that account for care in 2016, save it for care provided in 2017.