I have an amount on W2 box 10 from my FSA. This amount is added back to 1040 Line 1. This is supposed to be pretax dollar, why does it become taxable benefit?
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New Member

I have an amount on W2 box 10 from my FSA. This amount is added back to 1040 Line 1. This is supposed to be pretax dollar, why does it become taxable benefit?

 
3 Replies
New Member

I have an amount on W2 box 10 from my FSA. This amount is added back to 1040 Line 1. This is supposed to be pretax dollar, why does it become taxable benefit?

Box 10 is for the dependent care FSA contributions for the year. Unless you have childcare expenses during the year that qualify to offset the amount, then it becomes taxable income.

If you used the money to pay for Dependent Care Benefits, then during the W-2 interview process, on the pages that follow entering the actual boxes, you need to answer "Yes" to used money to pay for dependent care expenses.

Then, you will need to go through the Dependent Care section under Deductions and Credits. When it asks again if you used the money for dependent care for the year, you answer "Yes". 

New Member

I have an amount on W2 box 10 from my FSA. This amount is added back to 1040 Line 1. This is supposed to be pretax dollar, why does it become taxable benefit?

Thanks for your prompt reply!  

If one of the couple does not have a job, how to use form 2441 to claim the deductible benefits or the excluded benefits to offset the amount shown on box 10 of W2(dependent care FSA from the employer).  In other words how to avoid the addback to 1040 Line1.  Any other forms to claim?

New Member

I have an amount on W2 box 10 from my FSA. This amount is added back to 1040 Line 1. This is supposed to be pretax dollar, why does it become taxable benefit?

Unfortunately, no there is not anything you can do about it. You both have to work to be able to take the 2441 credit.
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