We over contribute to DCFSA by $5000. It's reflected in box 10 on W-2 forms. Will TurboTax catch it and automatically add non-qualified amounts back to taxable income?

The limit in 2021 is $10,500. I did $10,500 but my wife did another $5000. So we over contribute by $5000. But we only reimburse $5000 from the account for now. There is still $10,500 credit in the account.

512

Expert Alumni

Apr 18, 2022 5:08:31 AM

Yes, if your dependent care benefits were not rolled over or used on eligible child care expenses, TurboTax will add that $5,000 to your taxable income. After entering a W-2 with information in Box 10, TurboTax will ask if you had any funds left in your FSA at the end of the year. Whatever amount you do not roll over and is not marked for use on Form 2441 for dependent and child care expenses gets added to your taxable income on Line 1 of Form 1040. Line 1 will also say "DCB" to denote that dependent care benefits are being added to your other wages. To preview your 1040:

Open or continue your return.
Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu
Scroll down until you see Form 1040 Line 1 Wages, salaries, tips, etc.

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We over contribute to DCFSA by $5000. It's reflected in box 10 on W-2 forms. Will TurboTax catch it and automatically add non-qualified amounts back to taxable income?