I withdrew from my dependent care FSA but the withdrawal was not qualified. I need to show that on the tax form and pay taxes on it as income, but can't.

[aaron-turon]

I'm trying to do the following:

On Form 2441, Part III, put 0 in for qualified expenses, while also showing a withdrawal. At the end of the process, have "taxable benefits" which are included in wages (Line 7 of Form 1040) with the label "DCB" next to them.

[bine22]

why was this not qualfied? Did one of the spouses not he income?

[aaron-turon]

Yes, and was not actively looking for work. We misunderstood the FSA rules.

[bine22]

Jjust enter the expenses you paid. The FSA will be added to your taxable income if one spouse has no income.

[AnnetteB]

You can accomplish this by entering information for a child care provider and stating that the expenses paid were $0.00.  You must also have a dependent included on your return that would qualify for the child care credit. 

The amounts reported in box 10 of your W-2 for child care benefits would then be taxed on line 7 of your Form 1040 with the notation DCB.

[aaron-turon]

Unfortunately that did not work -- nothing shows on line 10, and the review tool flags the 0 amount as problematic. Any other suggestions?