topic My son's aunt provided childcare in my home worth $960 for Dec 2019 only. I'd like to claim this against Dependent FSA a/c. What tax form req'd given the amount? in Deductions & credits

My son's aunt provided childcare in my home worth $960 for Dec 2019 only. I'd like to claim this against Dependent FSA a/c. What tax form req'd given the amount?

Anonymous — Wed, 25 Mar 2020 21:38:52 GMT

Re: My son's aunt provided childcare in my home worth $960 for Dec 2019 only. I'd like to claim t...

DaveF1006 — Wed, 25 Mar 2020 22:08:33 GMT

Did you max out your FSA for the year? if you did, you cannot max out an FSA and then get an additional credit. Please read this Turbo Tax link for additional information.

If you haven't maxed out your FSA and wish to report the child care service that your son's aunt provided, you will need to report her information and social security number in the return. She will need to report this income she received in her own tax return as taxable income. Rather she will want to do this or not is a decision that you both will need to make. To report:

Go to tax tools
tools
topic search
type in 2441
Here is where you enter the information to get the credit.

Re: My son's aunt provided childcare in my home worth $960 for Dec 2019 only. I'd like to claim t...

Anonymous — Wed, 25 Mar 2020 22:30:19 GMT

<<Did you max out your FSA for the year?

Not totally clear on what that means: my Dependent Care FSA still has a total balance of $1400 from which I'd like to withdraw! I also have a regular health FSA of $1,000 which I fully used.

In December 2019, I paid the nanny for 2 weeks or $960 in total. I would like to get a distribution from my DFSA but I want to comply with tax laws for both nanny and I. We are related and I need to do the research on her behalf. My understanding is that because the amount is under $1,000 that I avoid the onerous reporting requirements of W-2, 1099 etc.

Re: My son's aunt provided childcare in my home worth $960 for Dec 2019 only. I'd like to claim t...

DawnC — Thu, 26 Mar 2020 09:55:28 GMT

I believe he is referring to amounts in Box 10 on your W-2, for your dependent care benefits. When you enter these amounts, they will show as taxable until you enter the amounts you spent on dependent care on Form 2441. The maximum tax-free funds you can take from an FSA for dependent care is $5K. But TurboTax will calculate the amount of your credit or taxable benefits income when you enter your expenses. To get to the entry screen for the credit,

In the search field in TurboTax, search for child care credit.
Select the Jump to child care credit link and we'll take you right there.

You will list the aunt as a child care provider. You will have to enter her SSN in order to get the credit as the IRS wants to know who you paid to provide care to your dependent. She is responsible for reporting the income on her tax return. If you paid other child care providers, you should list all of your child care expenses in this section. You can have multiple providers on Form 2441. If you use FSA funds to pay your child care expenses but don't enter those expenses, you are still paying income taxes on those 'benefits'. So, enter all of your expenses and let TurboTax figure the amount of the credit and/or the taxable amount of your benefits.

What is the Child and Dependent Care Credit?

Re: My son's aunt provided childcare in my home worth $960 for Dec 2019 only. I'd like to claim this against Dependent FSA a/c. What tax form req'd given the amount?

Hal_Al — Wed, 25 Mar 2020 23:26:31 GMT

The IRS doesn't need any documentation from you or your aunt. You request a distribution form your FSA, whatever their procedure is.

Then you claim it on part III of form 2441.

You do not need to give your aunt a W-2 or 1099-misc. But, she does need to report the income on her tax return. She would normally report it as self employment income. But, because she worked in your home, and the amount is less than $2200, she can report it as Household employee income and avoid self employment tax (social security and medicare tax).